An additional four-month period is meant to ensure greater system stability and user readiness, as well as smooth transition to new platform, according to the official ECB press release.
The Governing Council of the European Central Bank (ECB) has decided to reschedule the launch of the new real-time gross settlement (RTGS) system and its central liquidity management model, T2. The date for the go-live has been postponed by four months, from 21 November 2022 to 20 March 2023.
Subsequent to an assessment by the ECB’s Market Infrastructure Board, the decision was made in order to allow users more time to complete their testing in a stable environment. The decision also took into account the importance and systemic nature of T2, especially in view of the current geopolitical conditions and volatile financial markets, the ECB press release explained.
While most users would have been ready for the scheduled go-live date, others would not have fully completed their testing. Some market participants also experience delays due to temporary unavailability of the test environment and initial software deficiencies.
The Eurosystem is said to provide all the necessary support to market participants during their final preparations. Market participants that have not completed their testing successfully are encouraged to front-load their testing efforts in the additional period provided.
As explained by the ECB, TARGET2 is the real-time gross settlement (RTGS) system owned and operated by the Eurosystem. Central banks and commercial banks can submit payment orders in euro to TARGET2, where they are processed and settled in central bank money, i.e. money held in an account with a central bank. TARGET2 settles payments related to the Eurosystem’s monetary policy operations, as well as bank-to-bank and commercial transactions.
TARGET2 was meant to support the implementation of the Eurosystem’s monetary policy and the functioning of the euro money market, all while minimising systemic risk in the payments market, i.e. the possibility of a single actor causing an entire market to collapse and ensuring the efficient processing of cross-border payments in euro.
The consolidated platform brings together the RTGS system and the securities settlement platform run by the Eurosystem. This move will be contributing to the further harmonisation of European financial markets, while also unifying the technical and functional aspects of the TARGET2 and TARGET2-Securities platforms
RTGS will be introducing new common and optimised features and will replace TARGET2, all while optimising liquidity management across all TARGET Services. Deutsche Bundesbank, Banca d’Italia, Banque de France and Banco de España will be the four central banks acting as service providers for TARGET Services. They are delivering the software and providing the test environment for the T2-T2S consolidation project.
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