TARGET
Encyclopedia
TARGET was an interbank payment system for the real-time processing of cross-border transfers throughout the European Union
. It 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). In November 2007 it was replaced by TARGET2 (see below).
TARGET is mainly used for individual payments between banks, but it is also used for urgent transfers between companies, or even individuals, at the discretion of the banks involved. Communication between the national systems mainly uses the SWIFT
network.
, Easter Monday
, Labour Day (1 May), and the first and second days of Christmas (25 December and 26 December).
, Standard Chartered and HSBC
have decided to participate through the Dutch central bank DNB
.
), Germany (Deutsche Bundesbank
) and Italy (Banca d'Italia
). For the migration, the following four groups of participating countries were defined:
On 19 May 2008 the third and final group connected successfully to TARGET2.
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
. It included 16 national real-time gross settlement
Real Time Gross Settlement
Real time gross settlement systems are funds transfer systems where transfer of money or securities takes place from one bank to another on a "real time" and on "gross" basis. Settlement in "real time" means payment transaction is not subjected to any waiting period. The transactions are settled...
(RTGS) systems and the ECB
European Central Bank
The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
payment mechanism (EPM). TARGET provided access to more than 1,000 direct participants and more than 48,000 credit institutions (including branches and subsidiaries). In November 2007 it was replaced by TARGET2 (see below).
Infrastructure
TARGET itself is not, strictly speaking a funds transfer system, in that transfers cannot be fed into TARGET directly; it merely links existing national systems. TARGET provides interlinking and security components via which the national systems can communicate.TARGET is mainly used for individual payments between banks, but it is also used for urgent transfers between companies, or even individuals, at the discretion of the banks involved. Communication between the national systems mainly uses the SWIFT
Swift
The swifts are a family, Apodidae, of highly aerial birds. They are superficially similar to swallows, but are actually not closely related to passerine species at all; swifts are in the separate order Apodiformes, which they share with hummingbirds...
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 are connected indirectly via the Italian system, New BIREL. Slovenia (20 banks plus the Slovenian central bank) are 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 eurosTARGET holidays
The TARGET system is closed on Saturdays and Sundays and on the following public holidays in all participating countries: New Year (1 January), Good FridayGood Friday
Good Friday , is a religious holiday observed primarily by Christians commemorating the crucifixion of Jesus Christ and his death at Calvary. The holiday is observed during Holy Week as part of the Paschal Triduum on the Friday preceding Easter Sunday, and may coincide with the Jewish observance of...
, Easter Monday
Easter Monday
Easter Monday is the day after Easter Sunday and is celebrated as a holiday in some largely Christian cultures, especially Roman Catholic and Eastern Orthodox cultures...
, 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 TSBLloyds TSB
Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
, Standard Chartered and HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
have decided to participate through the Dutch central bank DNB
De Nederlandsche Bank
De Nederlandsche Bank is the central bank of the Netherlands. It is part of the European System of Central Banks .-History:...
.
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 FranceBanque de France
The Banque de France is the central bank of France; it is linked to the European Central Bank . Its main charge is to implement the interest rate policy of the European System of Central Banks...
), Germany (Deutsche Bundesbank
Deutsche Bundesbank
The Deutsche Bundesbank is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks . Due to its strength and former size, the Bundesbank is the most influential member of the ESCB. Both the Deutsche Bundesbank and the European Central Bank are...
) and Italy (Banca d'Italia
Banca d'Italia
Banca d'Italia is the central bank of Italy and part of the European System of Central Banks. It is located in Palazzo Koch, Roma, via Nazionale...
). 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 3 (2008-05-19)
- Denmark
- Estonia
- ECBEuropean Central BankThe European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
- 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 | |