TARGET2

The TARGET system (English, Trans - European Automated Real-time Gross Settlement Express Transfer System, dt about Trans-European Automated Real-time Gross settlement Express Settlement System) was introduced under the auspices of the European Monetary Institute. It is an infrastructure that is essential in the field of the single currency for the proper functioning of the policy. Using TARGET to the European Central Bank and the national central banks of the euro zone to perform in practice its monetary policy by bringing liquidity in the system or disconnect from him. About TARGET commercial banks should also take advantage of arbitrage opportunities between the different financial centers and thus ensure an alignment of short-term interest rates and, ultimately, the consistency of monetary policy. In this sense, TARGET is therefore mainly a means of monetary policy of the euro zone. TARGET was also an interbank funds transfer system that combined 16 national real -time gross settlement systems in Europe since 1999 and was replaced in November 2007 by TARGET2. The national gross settlement system in Germany was from November 2001 to November 2007 RTGSplus (previously ELS). TARGET has been developed by the European central banks primarily for the conduct of monetary policy of the European Central Bank. It was open to all credit institutions to carry out their financial transactions in euros. The advantage of TARGET was the rapid settlement of the transfers, 98% of all payments were made within 5 minutes.

At TARGET closing days, the system is closed in all participating States.

Construction

TARGET itself was not an independent referral system in the strict sense. You could not conduct a transfer order directly in TARGET. It combined only existing national systems. TARGET presented interlinking components and safety components that on their national system could communicate with each other. About TARGET individual payments were mainly carried out between banks. However, the system was also used for urgent transfers of businesses and in rare cases by private individuals; the banks were able to decide for themselves about it. At the end of each day there was a day-end vote on the ECB. The communication between the national systems was carried out mainly through the SWIFT network.

Participant

Participants (as of November 2006) the EU-15 countries, the ECB and Poland, Slovenia and Estonia. Here, the Polish system ( Sorbnet euro ) and the Estonian system were connected not directly but through the Italian New BIREL. Slovenia had no need to develop your own system. Around 20 domestic banks and the Bank of Slovenia were directly connected to the German RTGSplus and wrapped about their payments in euro. Overall, one could reach directly or indirectly via the TARGET system and the affiliated national systems approximately 40,000 financial institutions across Europe.

A transfer via TARGET cost the attached bank around 1 euro. Over the TARGET system 300,000 settlements with a total volume of about 2 trillion euros were made on average per day.

History

The payment professionals of all EU central banks and the European Monetary Institute (EMI) since 1995 were already working to TARGET. A testing and simulation period of 18 months was initiated in June 1997 and TARGET was on the first business of the Economic and Monetary Union level 3, ie on 4 January 1999, fully operational.

TARGET holidays

In addition to Saturdays and Sundays, the TARGET system was closed to European holidays in all participating States:

• New Year's Day (January 1 )
• Good Friday
• Easter Monday - each Gregorian date, not the Julian applicable as in the predominantly Orthodox Greece -
• Labor Day (May 1)
• First and Second Christmas Day ( December 25 and 26 )