ECB Reschedules Launch of New RTGS & Central Liquidity Management Model 

  • The launch date has been pushed back by four months
  • The consolidated platform combines the RTGS system and securities settlement platform
  • The new system will provide the market with enhanced and modernised services

The European Central Bank’s (ECB) Governing Council has decided to postpone the launch of the new real-time gross settlement (RTGS) system and its central liquidity management model, T2.

The launch date has been pushed back by four months, to March 20, 2023. The decision was made after the ECB Market Infrastructure Board determined that users needed more time to complete their testing in a stable environment. The decision also took into account T2’s importance and systemic nature, particularly in light of current geopolitical conditions and volatile financial markets.

The consolidated platform will combine the RTGS system and the Eurosystem’s securities settlement platform. The platform will help to harmonise European financial markets by bringing together the technical and functional aspects of the TARGET2 and TARGET2-Securities platforms.

 RTGS will be used in place of TARGET2 to improve liquidity management across all TARGET Services. TARGET Services will be provided by four central banks: Deutsche Bundesbank, Banca d’Italia, Banque de France, and Banco de Espaa. Central Banks are delivering the software and are providing the test environment for the consolidation project.

The Eurosystem will provide market participants with all necessary assistance during their final preparations. While most users are prepared for the scheduled go-live date, meeting the deadline has proven difficult. Market participants experienced delays as a result of the temporary unavailability of the test environment as well as initial software flaws.

For more than a decade, TARGET2 has ensured the safety and efficiency of European payments. Payments, however, have changed significantly during this time due to technological advances, new regulatory requirements, and shifting consumer demands.

When investors buy and sell securities, both the security and the payment must be exchanged, a process known as securities settlement. TARGET2-Securities, or T2S, is a secure platform that allows for simultaneous exchange, i.e. delivery versus payment.

The new RTGS system will provide the market with enhanced and modernised services. The ISO 20022 messaging standard will be used, as it is with T2S and TIPS. If the respective central banks decide to do so, the new system will be able to facilitate payments in multiple currencies.

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