The European Central Bank (ECB) has successfully launched the new T2 mass payment processing system with real-time gross settlement, which replaces TARGET 2.
The European Central Bank (ECB) said Tuesday that the new mass payment settlement system T2 It went into operation on March 20.
“The new consolidated payment system was successfully completed on the first day of operations,” the ECB said.
“The systems that have been modernized will contribute to the harmonization and efficiency of financial markets in Europe,” the ECB added.
The new T2 wholesale payment processing system includes the real-time gross settlement it’s a liquidity management instrument.
The migration to the new system took place between March 17 and 20.
T2 replaces TARGET2a payment system that allows you to transfer money between banks in the European Union (EU) in real time, known as real-time gross settlement.
T2 is the new real-time gross settlement system for the settlement of payments related to monetary policy operations, as well as bank-to-bank and commercial transactions.
TARGET2 processed payments worth €2.2 billion per day on average.
T2’s first day of operations went smoothly despite a late shutdown, the cause of which was identified and repaired.
The new real-time gross settlement system settled around 400,000 transactionswhich is similar to the average volume before migration.
EITHER software and the environment for the new system was provided by the Banca d’Italia, the Bank of Spain, the Banque de France and the Deutsche Bundesbank, the four national central banks that provide TARGET services (T2, TARGET2-Securities and TIPS).
All the central banks of the countries that share the euro have supported this project.
TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer) is the Trans-European Automatic Gross Settlement Transfer in Real Time system and TARGET2 is the second generation of this system.
The upgrade project was launched in December 2017 to harmonize and integrate TARGET services into benefit of European financial markets and reduce costs.
“The new system offers a increased cyber resilience and optimization of liquidity utilizationto the extent that participants can handle, manage and control central bank cash liquidity in all TARGET services”, adds the ECB.
Harmonization is achieved through the use of the ISO 20022 standard for payment messages and information on high and low value clearing systems, using the messaging service via SWIFT.
Participants also save costs thanks to common components shared by all TARGET services.
Technical changes were made to TARGET2 Securities in July 2022 in preparation for the launch of this new T2 system.
TARGET2 Securities facilitates the centralized settlement of securities transactions in euros or other currencies in central bank money.
The ECB also launched this new system after five incidents in October 2020, which affected the real-time payment settlement service of TARGET2 and TARGET2 Securities, when the system was out of service for ten hours.
Source: Observadora
