Embracing synergies across the Eurosystem s market infrastructures. Sylvain Debeaumont European Central Bank Focus session, 7 July 2017, Frankfurt

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1 Embracing synergies across the Eurosystem s market infrastructures Sylvain Debeaumont European Central Bank Focus session, 7 July 2017, Frankfurt

2 Table of contents What do we want to achieve? What do we propose? What follows?

3 What do we want to achieve? Consolidation of TARGET2 and T2S Improved efficiency Optimised liquidity management Easier access to services via harmonised interface Enhanced RTGS services Aligned use of messaging standards Reduced operational costs Increased cyber resilience

4 What do we want to achieve? Heterogeneity of participants profile Nb of transactions sent (daily average) participants making only operations with their central bank > 1000 Note: Based on TARGET2 data 2017 Source: TARGET2 Analytical Team

5 What do we want to achieve? Liquidity conditions % EUR billion EUR billion % of payments settled using credit line Excess liquidity liquidity velocity Note: Based on TARGET2 data 2017 Source: TARGET2 Analytical Team

6 What do we want to achieve? Central Bank set-up Proprietary solutions Single Shared Platform core services optional modules Proprietary Home Account PHA a/c PM a/c mon pol anc.syst. payments HAM a/c Home Account Standing Facilities Standing Facilities Reserve Management T2S DCA TIPS DCA Reserve Management

7 Table of contents 1 2 What do we want to achieve? What do we propose? Modular approach Centralised liquidity management Opening hours Data analytics ISO What follows?

8 What do we want to achieve? Modular approach Exploit all possible synergies from the consolidated platform

9 What do we propose? Modular approach today T2S Securities settlement Securities Settlement TARGET2 High-value payments HVP AS Reference Data Billing Data Warehouse Gateway Reference Data Billing Data Warehouse Gateway

10 What do we propose? Modular approach tomorrow T2S Securities settlement Securities Settlement Central Liquidity Management RTGS Services High-value payments HVP AS TIPS Instant payments 10 Reference Data Common Reference Reference Data Data Shared Billing Operational Services (Billing, Billing Scheduler, etc.) Data Warehouse Data Warehouse Data Warehouse Eurosystem Gateway Single Market Infrastructure Gateway Gateway

11 What do we want to achieve? Central Liquidity Management Allow participants to manage their liquidity in a flexible and comprehensive way

12 What do we want to achieve? Central liquidity management

13 What do we want to achieve? Central liquidity management Main Account Open market Standing facilities Cash operations Intraday credit Billing All operations with Central Banks Central Bank liquidity Adjustments Securities T2S RTGS TIPS Ancillary system High-value payments Instant payments Funds dedicated to specific businesses

14 What do we want to achieve? Central liquidity management Main Account T2S RTGS TIPS

15 What do we want to achieve? Central liquidity management Main Account RTGS

16 What do we want to achieve? Central liquidity management Main Account Bank B Main Account Bank A Main Account Bank C T2S RTGS TIPS T2S RTGS TIPS Liquidity overview Reserve management

17 What do we propose? Operating hours Longer operating hours to better service the euro settlement of customers active in different time zones

18 What do we propose? Correspondent banking needs Later closing Earlier opening

19 What do we propose? Operational day 00:00 00:30 02:30 03:00 18:00 18:45 19:30 20:00 24:00 RTGS HVP AS CLM Common modules Maintenance window (00:30 02:30) EOD SOD T2S TIPS Change of business day

20 What do we propose? Data analytics Exploit the mine of payments data to operate the system more smoothly and to better serve our participants

21 What do we propose? Data analytics services Granularity of data, expertise and tools Support in assessing the use of functionalities Support in comprehensive management of (intraday) liquidity Provide analysis and computation of network statistics Run stress simulations and analyse (in)direct implications of various scenarios

22 What do we propose? Data analytics services Network analysis Deviation from pattern Benchmarking

23 What do we propose? Migration to ISO Using the same messaging standard to communicate across all Eurosystem s market infrastructures

24 What do we propose? Migration to ISO Like for like is easier We need to move to ISO20022 Fully-fledged migration Why migrating if we only convert? Like for like allows for conversions

25 Table of content What do we want to achieve? What do we propose? What follows?

26 What have we done so far? February 2016 Public consultation on the future of RTGS services October 2016 Set up of the task force on future RTGS services May 2017 Public consultation on User Requirement Documents (closed on 30 June 2017)

27 What have we done so far? Feedback from the consultation on User Requirement Documents 2835 responses in total of which: 1082 on shared services 1026 on central liquidity management 662 on the future RTGS services

28 What is next? Planning Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Investigation phase Realisation phase December 16 April 17: Interaction with users May 17 June 17: Consultation with the market July 17: Review and integration of market feedback December 17: Decision by Governing Council

29 Thank you for the attention! ECB: market infrastructure and