The T2S system was conceived by the ECB as a mechanism for cutting cross-border trading costs through the creation of a streamlined pan-European platform. However, it became apparent towards the end of 2009 that the complex project was foundering in the face of resistance from market participants.
Finextra reports that the European Central Bank confirms that it has ripped up its original timetable for the introduction of a pan-European securities settlement system as it seeks to streamline its working procedures and gain a new consensus around the controversial project.
The Target2 Securities (T2S) system was conceived by the ECB as a mechanism for cutting cross-border trading costs through the creation of a streamlined pan-European platform for securities settlement against central bank money.
However, it became apparent towards the end of last year that the complex project was foundering in the face of resistance from market participants.
Speaking at the Sibos conference in Hong Kong in October, Jean-Michel Godeffroy, chairman of the T2S programme board admitted that there had been a seven-month delay to the completion of General Functional Specifications document, which outlines the technical requirements for the T2S system and that other challenges, over pricing and governance had yet to be addressed.
By early January it became apparent that the project would need to be delayed by at least a year to 2013.
In a quarterly review published by the ECB, Goddefroy has officially confirmed the deadline over-run, saying that the project has been hampered by both external and internal issues. The latter relates to the "complex organisation" of the T2S company which entails serpentine connections between the ECB and the four central banks chosen to run the project.
© ECB - European Central Bank
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