ECB published a report providing a summary of the self-assessment of the Trans-European Automated Real-time Gross settlement Express Transfer (TARGET2) system against the principles for financial market infrastructures (PFMIs). This summary is an accurate reflection of the self-assessment of TARGET2 as of January 01, 2018, against the systemically important payment systems (SIPS) Regulation.
The report reveals that, since the last assessment, TARGET2 has been regularly enhanced, mainly through minor technical and functional releases and through the 2017 introduction of the “ASI-6 real-time” settlement model, which supports ancillary systems offering real time payments. This update has not resulted in any changes that are significant for this self-assessment. The main risks to which TARGET2 is exposed are legal, credit, liquidity, operational/information security, custody, and general business risks. For credit and custody risks, the operator applies Eurosystem risk management frameworks, which are primarily set for monetary policy operations. The operator, therefore, has no influence on these frameworks. The other risks are all managed through different frameworks, which were developed by the operator in the specific context of TARGET2 and are aimed at identifying, measuring, monitoring, and mitigating these risks.
The TARGET2 yearly releases allow for the filling of the identified gaps and improvements to the efficiency of the system. TARGET2 is, as any other Systemically Important Payment System, overseen by the oversight function against the SIPS Regulation. Each TARGET2 national component is then assessed by the national competent oversight authority. TARGET2 was last assessed against the SIPS Regulation in 2015. Previously, TARGET2 had been assessed against the “Core Principles for Systemically Important Payment Systems” and “Business Continuity Oversight Expectations.” TARGET2, which is the real-time gross settlement (RTGS) system operated by the Eurosystem, settles euro-denominated payments on an individual basis, in real time and in central bank money with immediate finality.
Related Link: Disclosure Report (PDF)
Keywords: Europe, EU, PMI, FMI, RTGS, Target2, SIPS Regulation, Self-Assessment, PFMI, ECB
Previous ArticleESMA Updates Q&As on the Implementation of EMIR and CSDR
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
PRA published a public working draft, or PWD, of version 1.2.0 of the BoE Insurance XBRL taxonomy, along with the related technical artefacts.
CPMI published a report that sets out nineteen building blocks for a global roadmap to improve cross-border payments.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
ESMA published the final report on the guidelines on securitization repository data completeness and consistency thresholds.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.