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. 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).
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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 network.
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.
In June 2006 there were over 7 million TARGET payments, with a total value of over 47,000 billion euros[1]
The TARGET system is 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 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.
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:
On 19 May 2008 the third and final group connected successfully to TARGET2.
Slovakia joined Target2 on 1 January 2009. Bulgaria joined in February 2010.
There are two parallel schemes[2]:
| 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 | |
This article incorporates text translated from the corresponding German Wikipedia articles on TARGET and TARGET2 as of 4 April 2008.