Eurosystem updates infrastructure Vision
The European Central Bank has outlined its plans to consolidate the Target2 and Target2Securities (T2S) platforms, introduce a new European-wide instant payments platform by November 2017 and develop a new collateral management system.
During yesterday’s European Market Infrastructure of Tomorrow session at Sibos 2016, the Eurosystem’s “Vision 2020” plans were outlined by Yves Mersch, a member of the executive board at the ECB.
“The aim is for financial market integration,” he said, while explaining that three investigations had been launched to scope out projects in each area. The instant payments investigation must end by the first quarter of 2017, making the November deadline tight, but work has already begun. He did not mention deadlines for the other projects but promised “at the end of the investigation a decision will be taken”.
The ECB should work together with the European Securities and Markets Authority (Esma) and the European Commission to make it easier for financial institutions to implement their infrastructure update plans, said Philip Brown, co-chief executive of Clearstream Banking.
Concerns about a “reasonable level” of investment and joined up thinking when updating European securities, collateral and instant payment infrastructures were expressed by Lieve Mostrey, director of chief technology and services, Euroclear and also by other members of the panel. The two retail bankers on the panel, Mark Buitenhek, global head of transaction services, ING and Antonio Massanell, deputy chairman of CaixaBank, called for standardisation and speed in regard to the instant payments project.
Buitenhek cited the decision not to include the mobile channel in the previous long-running single euro payments area (SEPA) as “a mistake” and warned that “anything that takes longer than five years [as SEPA did] could be overtaken by new technology and new realities”.
Distributed ledger technology was inevitably one such potentially disruptive technology discussed by the panel. Massanell asked why existing infrastructure platforms from central bankers, Swift and other such providers, couldn’t harness such innovations themselves in order to “help the banks by providing better platforms” that aid “cost control”.
In a spirit of cooperation, Clearstream’s Brown said the ongoing T2S migration, which Euroclear completed successfully ten days ago after missing its initial deadline six months ago, was “helping harmonisation” in the industry and “PSD II should too” on the retail side.
“A lot has been done already to bring together cash, securities and collateralisation, but please be clear what you want,” he concluded.
By Neil Ainger, Daily News at Sibos reporter