PRESS RELEASE

Demonstration of TARGET year 2000 compliance

27 September 1999

On Saturday, 25 September 1999, the Trans-European Real-time Gross Settlement Express Transfer System (TARGET) demonstrated its year 2000 compliance in a general testing of a full business day in a simulated year 2000 environment. Several hundreds of credit institutions, all fifteen national RTGS systems and the payment system of the ECB were involved in this test.

TARGET is a decentralised system connecting the national real-time gross settlement (RTGS) systems via an interlinking infrastructure and is mainly used for large value cross-border transfers.

Systems opened at 11 a.m. with the business date 3rd January 2000 and processed cross-border customer and interbank payments, which were sent and received by the participating credit institutions. Settlement of ancillary systems, which opened specifically for this TARGET demonstration, was completed successfully. For example, the Euro 1 system of the Euro Banking Association (EBA) conducted a settlement cycle involving several member banks. No year 2000 related problems were detected.

A technical problem in one country which was not related to Y2K testing prevented this country from actively participating in the test. This country, however, had already proven its Year 2000 compliance during previous TARGET Year 2000 testing activities and also in the Global Year 2000 test organised by the New York Clearing House on 12th and 13th June 1999.

The successful demonstration of 25th September 1999 completes several TARGET test cycles, which started with the examination of the basic components and went systematically through all layers of the system, covering in addition to the move from 1999 to 2000 also the leap year issue in 2000. TARGET will enter now a moratorium period from 1st October 1999 until 1st March 2000, where in general no changes to the systems should be done. In case of "emergency changes" to the existing systems, strict risk evaluation and re-testing criteria will be applied.

In parallel to the testing activities, contingency procedures have been reconsidered and tested, and a detailed action plan for the transition to the year 2000 is being prepared.

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