EUROPEAN CENTRAL BANK ABOUT TARGET 2
TARGET NEWSLETTER Q2 2009
The time when large-value payment systems differed greatly between countries is gone for good. In Europe, the area of large-value payment systems has undergone deep changes in a relatively short time span. One example of this is TARGET.
The creation of TARGET established an EU-wide RTGS system for the settlement of our currency , the euro. Since day one, TARGET has been an essential vehicle for the implementation of the Eurosystems’ monetary policy and has helped to create a single money market within the euro area.
Economic integration has been, and will continue to be, vigorously backed by the European Union and regulators in the area, and has been widely supported by the market. In response, the second-generation system, TARGET2, introduces a uniform wholesale payment infrastructure by means of a single technical platform. This further levels the playing field and provides the euro money markets with increased efficiency, greater harmonisation in business practices and the opportunity for further integration.
TARGET can be considered to be the backbone infrastructure of the whole economy. TARGET settles, in real time, the equivalent of the annual GDP of the entire euro area every 3.4 days. Thus, the smooth functioning of TARGET is of paramount importance for the stability of the financial system and is essential for the effective implementation of the single monetary policy.
More than ever, given the very demanding circumstances at present, confidence is key and the availability of liquidity, together with the ability to shift it around, is crucial. The Eurosystem is well aware that the robustness and smooth operation of TARGET is indispensable for the stability of the currency, the financial system and the economy in general. TARGET has been available 100% of the time since the global economy was hit in mid-September 2009. With TARGET, the Eurosystem will continue to offer a solid anchor of stability and confidence.
TARGET is a system which is in permanent evolution and which pays heed to needs of the market. In today’s financial markets, risk reduction, efficiency, cost consciousness, resilience and practicality will clearly receive more attention than before. An interest in these issues is likely to remain. Thus, development plans for TARGET are expected to follow the same path. At the same time, a focus will be placed on mitigating systemic risk even further.
Get the full TARGET newsletter here
http://www.ecb.int/paym/t2/shared/pdf/20090619_T2newsletter.pdf
To hear more about Wholesale Payment Risks and how to mitigate them, join our Master Class
MASTERING WHOLESALE & LARGE VALUE PAYMENT RISK
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THREE MORE BANKS TO SUPPORT CLS/ICAP JOINT VENTURE
CLS Group, and Traiana, an ICAP company (IAP.L), announced in July 2009 that Bank of America (NYSE: BAC), Credit Suisse (NYSE: CS) and Morgan Stanley (NYSE: MS) have agreed to support their joint venture which is set to provide trade aggregation services to participants active in the over-the-counter FX market. The joint venture was announced in April 2009 between CLS Group, the global industry standard for FX settlement services, and ICAP, the world’s leading interdealer broker.
The three firms join a founder group that has committed support to the joint venture consisting of: Citigroup (NYSE: C), Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB), J.P. Morgan (NYSE: JPM) and Royal Bank of Scotland (RBS.L).
The joint venture will provide the means to reduce operational risk, rationalise and consolidate legacy post trade processes and reduce post trade costs in the global FX markets, at a time when volumes have increased substantially. Traiana, an ICAP company, will be providing technology to the venture using its market-standard Traina Harmony network.
The additions are a sign of continued industry support for the service, which will be rolled out to participating firms following regulator approval.
Rob Close, Chief Executive Officer of CLS Group and President and CEO of CLS Bank International said: “We are excited to add these new participants, which as leading firms in prime brokerage and high frequency trading segments will benefit greatly from the service. Further, the value of our aggregation service increases with participation, and adding Bank of America, Morgan Stanley and Credit Suisse to the group of founding banks will accelerate benefits to all participants.”
Gil Mandelzis, Traina’s Chief Executive Officer said: “The growing support from FX market leaders demonstrates the momentum that this initiative has gathered. The addition of Bank of America, Credit Suisse and Morgan Stanley bring us closer to realizing our vision to reshape post-trade processing and promote market growth.”
To learn more about different payment systems and how to successfully master wholesale and large value payment risks >
Join our Master Class
Mastering Wholesale and Large Value Payment Risks
with Stanley Epstein
February 16th & 17th, 2010
London
Learn more here
http://nuparc.com/divlearn/executive-training-payment-risks/
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