Launch of the TARGET2 payment system
Banka Slovenije, Slovenian banks and savings banks, and the Central Securities Clearing Corporation have joined the new TARGET2 payment system.
The TARGET2 payment system is a centralized EU-wide real-time gross settlement (RTGS) system, which will gradually replace the old TARGET system, which was established when the euro was introduced in 1999. Like the older TARGET system, the purpose of TARGET2, launched today, is to facilitate real time settlement of predominantly high-value euro payments and urgent payments in central bank money, while inter-bank settlement is carried over on the accounts of banks held with the central bank.
Unlike the old system, which depended on a network of interconnected national RTGS systems, TARGET2 is a centralized technical solution. The single technical infrastructure, the Single Shared Platform (SSP) of the new system is operated by the national central banks of Germany, Italy and France on behalf of the Eurosystem. Within the hierarchical governance of the TARGET2 system, the highest level is held by the Governing Council of the ECB, while the subsidiary level of competence is held by national central banks belonging to the Eurosystem. Due to the fact that the technically single system is legally structured as a set of payment systems, components of the TARGET2 system, these central banks manage these components and maintain relations with banks which have opened settlement accounts with them. From today, Banka Slovenije therefore formally manages its own system component named TARGET2-Slovenia.
Banka Slovenije, banks and savings banks, and the Central Securities Clearing Corporation have been part of the TARGET system since 1 January 2007 (from the date of introduction of the euro), and today – in accordance with the scheduled migration windows – they became members of the TARGET2 system. The migration of all members of the old system into the TARGET2 environment will be carried out gradually till 18 May 2008, and the Slovenian banking environment is carrying out the migration at the earliest possible date, i.e. 19 November 2007.
The establishment of the new system is a step towards integration, harmonization and rationalization of European payment and settlement systems; it is particularly significant for banks, as it brings a standardization of procedures and the possibility of better liquidity management. The migration to the TARGET2 system brings no changes for customers, as they will still be able to take advantage of real-time (immediate) settlement of domestic and cross border urgent payments and payments of large amounts denominated in euros.