TARGET2 - PowerPoint PPT Presentation

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TARGET2

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... Migration TARGET TARGET Trans-European Automated Real-time Gross settlement Express Transfer system TARGET1 From TARGET to ... Importance of providing ... – PowerPoint PPT presentation

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Title: TARGET2


1
  • TARGET2
  • Richard Derksen Conference Financial
    Sector of Macedonia on Payments and
    Securities Settlement Systems
  • Ohrid 24 June 2008

2
Contents
  • TARGET
  • Scope and framework TARGET2
  • Single Shared Platform
  • Project planning
  • Migration

3
TARGET
  • TARGET
  • Trans-European
  • Automated
  • Real-time
  • Gross settlement
  • Express
  • Transfer system

4
The ESCB payment system
NCB-A
NCB-B
Interlinking
bank A
bank D
bank B
bank C
5
TARGET1
  • Expensive
  • Inflexible
  • Different pricing
  • Different products / services
  • Different standards

6
From TARGET to TARGET2
7
TARGET2 platform
NL
  • One central platform for NCBs for the real time
    gross settlement of large value payments
  • The central TARGET2 platform, called Single
    Shared Platfom (SSP), is built by 3 NCBs (3CB)
  • Bundesbank, Banque de France and Banca dItalia
  • The platform offers some mandatory and some
    optional modules.
  • Operational per 19 November 2007 (group 1)

8
TARGET2 in Europe
Countries on TARGET2
---- of which
Other EU-countries
9
TARGET2
NL
  • TARGET2 offers
  • High availability
  • Uniform pricing
  • Uniform functionality
  • Harmonisation
  • Advanced tools for liquidity management
  • Ready for new countries

10
TARGET2 Operations
  • All RTGS operations may be processed in TARGET2
  • individual operations settled in real-time and in
    central bank money
  • no exclusion according to amount or type of
    operations
  • Wholesale payments are a main goal for TARGET2
  • All types of operations
  • credit transfers
  • direct debits (limited usage)
  • mandated payments
  • All types of business
  • payments between market participants
  • central bank operations
  • settlement operations of ancillary systems

11
TARGET2 operational day
12
TARGET2 operational day
  • Purpose of the different phases
  • Start-of-day (1 2)
  • Night-time processing (3)
  • Technical maintenance window (4)
  • Preparation for day trade phase (5)
  • Day trade phase I (6)
  • Day trade phase II (7)
  • End-of-day (8 9)

13
Payment interface- FIN Copy -
SWIFTNet FIN
MT 011
Bank B SSP country
Bank A SSP country
MT 012
MT 103() / 202/204
MT 103() / 202 / 204
MT 019
MT 096
MT 097
PM
Participant Interface (Y-copy)
Booking instruction
mandatory
Acknowledgement
either / or
Payment Processing
optional
14
Single Shared Platform
  • Centralized solution single platform, no
    interlinking
  • central payments processing DE, IT
    (workload distribution between regions)
  • central datawarehouse and customer services FR

15
Single Shared Platform
16
Ancillary systems settlement
17
Stakeholders TARGET2
18
Migration groups
  • Group composition aimed at minimising project
    risk, reducing effect on level playing field and
    limiting the costs for central banks and users
  • Data migration 19 November 2007, 18 February
    2008, 19 May 2008

Not needed
19
Migration DNB
NL
  • Big Bang!
  • No fall-back, as current systems will be
    terminated
  • Extensive testing (June 2007 until January 2008)
  • Importance of providing information to Clearing
    members, Ancillary systems, DNB itself and all
    the customers
  • Website
  • Meetings (involvement SWIFT)
  • Monitoring of progress
  • Involvement CIearing members in drafting test
    scenarios
  • but some changes before or after TARGET2
    migration
  • change of AS settlement model
  • terminating of domestic payment products

20
Objective
TARGET2 user testing
  • Check readiness from business, operational and
    procedural viewpoints

Implementation
Usage of a separate user test environment
Several testing phases with different purposes
21
Pricing
  • Objectives cost recovery, competitiveness and
    broad access
  • Pricing of transactions pricing scheme with a
    monthly fee (100 euro or 1.250 euro) plus
    transaction fee of between EUR 0.125 and 0.80
  • Optional services (e.g. liquidity pooling and
    services related to ancillary systems) are priced
    separately

22
Summing up
NL
  • TARGET2 is a sort of 3rd wave of Euro
  • Impact for national markets is big, but provides
    them (and foreign banks) directly with all
    benefits of a technically centralized platform (
    legally it is a decentralized system)
  • One pot of liquidity, one window for info on all
    TARGET payments
  • Migration will be challenging and require a lot
    of testing and hard work

23

Thank you
24
Liquidity pooling - Virtual account
  • virtual balance balance on (single) accounts
    credit lines
  • possibility to use this position by each group
    account holder
  • booking on the single accounts (not on the
    virtual account)
  • only intra-day levelling off at the end of
    day mandatory
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