TARGET

For other uses, see Target (disambiguation).

TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer System) was an interbank payment system for the real-time processing of cross-border transfers throughout the European Union. TARGET was replaced in November 2007 by TARGET2.

TARGET

TARGET included 16 national real-time gross settlement (RTGS) systems and the ECB payment mechanism (EPM). TARGET provided access to more than 1,000 direct participants and more than 48,000 credit institutions (including branches and subsidiaries).

Infrastructure

TARGET itself was not, strictly speaking a funds transfer system, in that transfers were not fed into TARGET directly; it merely linked existing national systems. TARGET provided interlinking and security components via which the national systems could communicate.

TARGET was mainly used for individual payments between banks, but it was also used for urgent transfers between companies, or even individuals, at the discretion of the banks involved. Communication between the national systems mainly used the SWIFT network.

Participants

As of November 2006, the participants were the EU15 countries and the ECB, plus Poland, Slovenia, and Estonia. The Polish and Estonian systems were connected indirectly via the Italian system, New BIREL. Slovenia (20 banks plus the Slovenian central bank) were connected direct to the German RTGSplus system.

Volume

In June 2006 there were over 7 million TARGET payments, with a total value of over 47,000 billion euros

TARGET holidays

The TARGET system was closed on Saturdays and Sundays and on the following public holidays in all participating countries: New Year (1 January), Good Friday, Easter Monday, Labour Day (1 May), and the first and second days of Christmas (25 December and 26 December).

TARGET2

TARGET2 is the joint gross clearing system of the ESCB that unifies the technical infrastructure of the 26 central (note-issuing) banks of the European Union. It went live on 19 November 2007. However, Sweden and the UK have elected not to participate in TARGET2 – banks in these two countries will have to use alternative means to make large cross-border euro payments. Indeed, Lloyds TSB, Standard Chartered and HSBC have decided to participate through the Dutch central bank DNB.

Migration to TARGET2

The implementation of TARGET2 was based on a decision of the ECB Council of Autumn 2002 and was maintained by the three central banks of France (Banque de France), Germany (Deutsche Bundesbank) and Italy (Banca d'Italia). For the migration, the following four groups of participating countries were defined:

Group 1 (2007-11-19)

• Austria
• Cyprus
• Germany
• Latvia
• Lithuania
• Luxembourg
• Malta
• Slovenia

Group 2 (2008-02-18)

• Belgium
• Finland
• France
• Ireland
• Netherlands
• Portugal
• Spain

Group 3 (2008-05-19)

• Denmark
• Estonia
• ECB
• Greece
• Italy
• Poland

Group 4 (2008-09-15)

• for unforeseen circumstances

On 19 May 2008 the third and final group connected successfully to TARGET2.

TARGET2 2009–2010

Slovakia joined Target2 on 1 January 2009. Bulgaria joined in February 2010.

Transaction prices for TARGET2

There are two parallel schemes:

• Recurring fixed charges and a fixed transaction fee
  • Monthly fixed charge: €100.00
  • Single transaction price: €0.80
• Recurring fixed charge and a variable transaction fee based on number of transactions
  • Monthly fixed charge: €1,250.00
  • Variable transaction price:

Band	Number of monthly transactions		Price
	between	and
1	1	10,000	€0.60
2	10,001	25,000	€0.50
3	25,001	50,000	€0.40
4	50,001	100,000	€0.20
5	more than 100,000		€0.125

See also

• TARGET2 Securities
• SWIFT
• Fedwire

References

This article incorporates text translated from the corresponding German Wikipedia articles on TARGET and TARGET2 as of 4 April 2008.