30 November 2006

ECB says T2S does not eliminate competition

Speeking at the EU Commission’s Conference on “The EU’s new regime for clearing and settlement in Europe” in Brussels, Ms. Tumpel-Gugerell, Member of the Executive Board of the ECB, opposed the fears of some market participants that by introducing TARGET2-Securities the Eurosystem will eliminate competition in the field of securities settlement. “The underlying assumption is that by merging CSDs settlement platforms into a single one, the Eurosystem will create a monopoly. In reality competition between them is already very limited.”

“If anything, T2S will increase the possibilities for choice and competition. Participants will be able to choose among multiple CSDs to access a common settlement engine”, she continued.

Tumpel-Gugerell criticised that there is still no example of a fully integrated cross-border settlement system in Europe. “It is particularly striking that, almost eight years after the introduction of the single currency, the euro area still lacks an efficient, integrated securities infrastructure that would support the operation of a single financial market”, she said, mentioning also the difficulty faced by independent organizations in coordinating solutions for integration across multiple countries, and involving many different participants.

“TARGET2-Securities shares the same objective as other public initiatives in this field, most notably the Code of Conduct prepared by the European Commission. The common objective is to achieve higher efficiency and lower costs through greater competition”, Tumpel-Gugerell explained. “The Code of Conduct pursues this objective through the self-commitment of CSDs to provide price transparency, to facilitate access and interoperability, and to implement service unbundling and accounting separation. TARGET2-Securities does it from an operational angle”.

A Feasibility Study will be presented to the Governing Council in February 2007.
A Meeting with representatives from banking, clearing and issuer organizations, will be held on the 18th and 19th of December this year.

Full speech

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