The Trans-European Automated Real-Time Gross Settlement Express Transfer System
TARGET2 (short for Trans-European Automated Real-time Gross settlement Express Transfer system) is the real-time gross settlement (RTGS) system for euro payments, offered by the Eurosystem (the European Central Bank and the central banks of the Member States that have adopted the euro).
The system is used for the settlement of central bank operations, large-value euro interbank transfers as well as other payments in euro. The cash positions stemming from the ancillary systems (payment systems and securities settlement systems) are also settled via the system.
The system provides real-time processing of the payments and settlement in central bank money with immediate finality. TARGET2 was launched on 19 November 2007 replacing the first generation of the system, named TARGET (that went live on 4 January 1999).
The system offers harmonized core services and a single technical infrastructure, with increased efficiency, including in terms of cost recovery.
Legally, TARGET2 is structured as a multiplicity of national payment systems (referred to as national TARGET2 components), with harmonized operating rules.
Three Eurosystem central banks – Banca d'Italia, Banque de France and Deutsche Bundesbank – jointly provide the single technical infrastructure, the Single Shared Platform (SSP) for TARGET2, and operate it on behalf of the Eurosystem.
The national component TARGET2-România
Although the connection to TARGET2 becomes mandatory only when new Member States join the euro area, Banca Naţională a României decided in January 2010 to connect to TARGET2 prior to euro adoption. The decision was basically motivated by the interest of the Romanian banking community and the retail payment systems and securities settlement systems operators in the implementation, at national level, of an efficient payment infrastructure in euro . At the same time, this decision aimed at ensuring the necessary conditions for euro adoption.
By implementing this system, NBR responded to the needs of banking and business sectors to implement a better, faster, and more efficient payment channel for processing interbank payments in euro, both for the banks and their clients.
The Romanian component is called TARGET2-România and was successfully launched on 4 July 2011.
Currently, there are registered as participants in TARGET2-România: 21 PM holders (20 credit institutions and Banca Naţională a României), 8 DCA holders (6 credit institutions, Banca Națională a României and Depozitarul Central S.A.) and two ancillary systems.
The system fulfils the conditions for a systemic payment system and, consequently, it was designated by Order of the Governor of the National Bank of Romania no.637/15.06.2011, as falling under the provisions of Law no.253/2004 on settlement finality in payment and securities settlement systems, as modified from time to time (transposing into the Romanian legislation the Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payments and securities settlement systems, as modified from time to time).
TARGET2-România system rules are laid down in the Order of the National Bank of Romania no.4/2015 (Romanian only) on the functioning of the TARGET2-România payment system, as subsequently amended and supplemented.