Introduction

Growing importance

Payment and settlement systems have been growing in importance over the past two decades. This is a result of an increase in both the volume and the value of transactions stemming from money and foreign exchange markets and from financial markets in general. The introduction of the euro in 1999 fostered their integration in the euro area and in the European Union (EU) in general. back to top

The ECB's interest

Like any central bank, the ECB, together with the Eurosystem is interested in the prudent design and management of the payment and securities clearing and settlement systems which process its currency. It pays close attention to their smooth functioning, as well as to reducing the related potential risks.

The smooth functioning is crucial for

• a sound currency and for the conduct of monetary policy,
• the functioning of financial markets, and
• the maintenance of banking and financial stability.

back to top

The Eurosystem's task

The Eurosystem has the statutory task of promoting the smooth operation of payment and settlement systems (Article 105.2 of the Treaty establishing the European Community and Article 3 of the Statute of the European System of Central Banks and of the European Central Bank).

The Eurosystem fulfils its task by

• providing payment and securities settlement facilities: the Eurosystem runs a settlement system for large-value payments in euro (TARGET2). It also provides a mechanism for the cross-border use of collateral (CCBM);
  
  
• overseeing the euro payment and settlement systems: the Eurosystem sets standards to ensure the soundness and efficiency of systems handling euro transactions. It also assesses the continuous compliance of euro payment and settlement systems with these standards;
  
  
• setting standards for securities clearing and settlement systems;
  
  
• ensuring an integrated regulatory and oversight framework for securities settlement systems (e.g. in the framework of the cooperation between the European System of Central Banks and the Committee of European Securities Regulators (ESCB-CESR));
  
  
• acting as a catalyst for change: the Eurosystem promotes efficiency in payment systems and the adaptation of the infrastructure to the needs of the single euro payments area (SEPA). It also promotes an efficient securities market by encouraging the removal of barriers towards integration.

back to top