PRESS RELEASE

TARGET: temporary extended service window

11 January 1999

TARGET proved successful in its first week of operation, handling a larger number of payments than had been expected. Few technical problems were experienced and most of these had no business implications for the users of the system.

Most of the problems encountered stemmed from: 1) the high concentration of payment flows in the late hours of the day; and 2) difficulties experienced by several banks in adapting to the TARGET rules and creating TARGET-compliant messages. Therefore, at the end of each business day, a substantial number of payments remained unsettled. This led to higher than expected rates of payment rejection.

To give banks time to adjust to this new environment, the European System of Central Banks has decided that the final closing time of the TARGET system will be temporarily extended until 7 p.m., CET, from 11 January to 29 January inclusive. The cut-off time for customer payments will continue to be 5 p.m.

This extended service window should only be used by banks which experience difficulties in settling their last payments before the normal closing time of 6 p.m. It should not be considered as an extension of the normal TARGET hours of operation. Consequently, any use of the extended service window will result in an additional charge of EUR 15 per cross-border payment.

Moreover, access to the deposit facility of the Eurosystem will be available during this period for one hour (instead of 30 minutes) after the closure of the TARGET system.

There is no intention to extend this facility beyond the end of January 1999. In the longer run, the smooth operation of TARGET will depend on banks respecting the following recommendations.

  1. Back offices should be very careful to complete TARGET messages according to the published rules.
  2. Back offices should monitor the settlement of TARGET payments, in particular during the last few hours of the day, and should react quickly to rejected payments.
  3. Front offices should cease to enter into contracts for same-day value sufficiently in advance of 6 p.m. to enable back offices to forward payment orders to TARGET before the system closes at 6 p.m.

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