21 Facts About TARGET2

TARGET2 is the real-time gross settlement system for the Eurozone, and is available to non-Eurozone countries.

TARGET2 is based on an integrated central technical infrastructure, called the Single Shared Platform.

TARGET2 is an interbank RTGS payment system for the clearing of cross-border transfers in the eurozone.

Implementation of TARGET2 was based on a decision of the ECB Council of autumn 2002.

TARGET2 started operations on 19 November 2007, when the first group of countries migrated to the SSP.

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On 18 February 2008, the second migration successfully migrated to TARGET2, comprising Belgium, Finland, France, Ireland, the Netherlands, Portugal and Spain.

On 19 May 2008, the final group migrated to TARGET2, comprising Denmark, Estonia, Greece, Italy, Poland and the ECB.

Use of TARGET2 is mandatory for the settlement of any euro operations involving the Eurosystem.

Participation in TARGET2 is mandatory for new member states joining the Eurozone.

In 2012, TARGET2 had 999 direct participants, 3,386 indirect participants and 13,313 correspondents.

TARGET2 is the real-time gross settlement system with payment transactions being settled one by one on a continuous basis in central bank money with immediate finality.

TARGET2 mainly settles operations of monetary policy and money market operations.

TARGET2 has to be used for all payments involving the Eurosystem, as well as for the settlement of operations of all large-value net settlement systems and securities settlement systems handling the euro.

In terms of the value processed, TARGET2 is one of the largest payment systems in the world.

TARGET2 provides settlement services for a wide range of ancillary systems.

TARGET2 users have, via the Information and Control Module, access to comprehensive online information and easy-to-use liquidity management features that meet their business needs.

TARGET2 has a range of features allowing efficient liquidity management, including payment priorities, timed transactions, liquidity reservation facilities, limits, liquidity pooling and optimisation procedures.

In October, 2020, the system and TARGET2 Securities experienced an almost-11-hour outage, attributed to a "software glitch in a third-party network device" by the ECB, per a report.

TARGET2 proved that the ECB system compensated the interruption and reversal in capital flows triggered by the financial crisis by shifting refinancing credit among national central banks.

TARGET2 considers the resulting path dependence in policy-making a "trap".

Analysis of TARGET2 balances countering the Ifo conclusions have been advanced by economist Karl Whelan at University College Dublin.