TARGET Services

TARGET enables the NCBs of the Eurosystem to provide a unified platform which, together with other financial markets and institutions, is a key infrastructure of the financial system, and contributes decisively to monetary and financial stability, monetary policy implementation and the smooth functioning of the markets.

• TARGET ensures central liquidity management and monitoring, with liquidity being clearly allocated for the specific needs of each supported TARGET service through a dedicated real time interface.
•  It offers harmonised procedures for the settlement operations of ancillary systems, i.e. clearing and securities settlement systems.
• It provides a high level of reliability with advanced cybersecurity and business continuity mechanisms by using state-of-the-art IT tools.
• TARGET enhances the harmonisation of banking operations, contributing to the smooth and efficient processing of payments, and supporting services that give a competitive edge and facilitate transactions of financial institutions, businesses and individuals.
• It offers a single price structure applicable to both intra-national and cross-border payments, aiming to achieve a high level of cost recovery.
• It provides access to historical and warehoused data and allows generation of ad-hoc reports for analysis and decision making purposes.
• TARGET complies with the ISO 20022 standard for message submission, allowing participating entities to use the network service provider of their choice.

TARGET Services are designed to provide a unified and harmonised platform for payments, securities settlement, instant payments and collateral management in the euro area as a whole. The key elements of the TARGET architecture are the following:

1. Eurosystem Single Market Infrastructure Gateway – ESMIG

• The Eurosystem Single Market Infrastructure Gateway (ESMIG) is a harmonised interface that makes it easier to access TARGET Services from a single entry point.
•  Participants connecting to this gateway gain access to all TARGET Services (T2, T2S, TIPS, ECMS).
•  ESMIG manages message routing, security, authentication and tracking.

2. Shared Components

Shared Components facilitate all TARGET Services, ensuring efficiency and standardisation of individual processes:

• Central Liquidity Management (CLM): used to push/pull liquidity to/from the different supported services (T2, T2S, TIPS).
•  CRDM (Common Reference Data Management): central management of static data (participants, accounts, reference data).
•  Billing Module: uniform pricing of all Target Services.
•  Data Warehouse (DW): consolidated reporting, statistics and data analysis.
•  TARGET Services Analytical Environment: for simulations and quantitative analyses of T2 and T2S data that contribute to decision-making by institutions of the Eurosystem banking community.

3. Specialised Services

Each TARGET Service maintains its own settlement functions:

• T2: Real-time Gross Settlement System (RTGS) in central bank money, by managing Main Cash Accounts (MCAs).
•  T2S: Securities settlement in central bank money using Dedicated Cash Accounts (DCAs).
•  TIPS: Instant payments in real time, available 24/7/365.
•  ECMS: Collateral management system for credit operations.

4. Accounts Structure

• Main Cash Accounts (MCAs): maintained at T2 and used for central liquidity management.
•  Dedicated Cash Accounts (DCAs): maintained for specific services, i.e. Τ2, T2S and TIPS.

5. Standardisation and Interoperability

• All transactions are based on the international ISO 20022 standard, with a view to harmonisation and interoperability with other infrastructures.

6. Security and Resilience

• TARGET architecture includes sophisticated cybersecurity measures, backup data centres and business continuity procedures.
•  It is designed to provide high availability and operational resilience.

History of TARGET

• 1999: Launch of TARGET (Trans-European Automated Real-time Gross settlement Express Transfer), simultaneously with the introduction of the euro. TARGET was aimed at providing large-value clearing and settlement services in real time across the euro area.
•  2007-2008: Creation of TARGET2 as the second generation of TARGET, with a Single Shared Platform (SSP) for all central banks and participants.
•  2015: Launch of TARGET2-Securities (T2S), a common platform across Europe for securities settlement in central bank money, which contributed to the integration of European capital markets.
•  2018: Introduction of TARGET Instant Payment Settlement (TIPS), which allows instant payments in euro to be executed in seconds, around the clock and every day of the year.
•  2023: Completion of the migration from TARGET2 to the new TARGET, as part of the TARGET Consolidation project, with unified systems and a common architecture.
•  2024-2025: Gradual implementation of the Eurosystem Collateral Management System (ECMS), which provides uniform collateral management for all Eurosystem credit operations.

Participation in TARGET and its supported services is governed by Eurosystem rules and mainly concerns entities that need direct access to settlements in central bank money. Specifically, TARGET participants include:

• Central banks, which manage accounts and liquidity in TARGET.
• Payment service providers established in the European Union or the European Economic Area, including those acting through a branch in the EU or the EEA.
• Payment service providers established outside the European Union or the European Economic Area, acting through a branch in the EU or the EEA.
• Ancillary Systems, i.e. payment and settlement infrastructures (e.g. for securities).

The operational framework of the TARGET-GR Real-time Gross Settlement Express Transfer System is described in detail in its Operating Regulation, which entered into force on 20 March 2023 by virtue of Monetary Policy Council Act No. 122/15.09.2022, as amended.

TARGET results from the Eurosystem’s efforts to enhance the efficiency of European financial markets and to offer new services employing modern technologies. This gives a competitive edge over other related systems and facilitates transactions of financial institutions, businesses and individuals.

• T2: also referred to as RTGS, supports the real-time gross settlement (RTGS) of payment orders and fund transfers
• TARGET2-Securities (T2S): the securities settlement service
•  TARGET Instant Payment Settlement (TIPS): the instant payment settlement service
•  Eurosystem Collateral Management System (ECMS): system for managing assets used as collateral in Eurosystem credit operations.