29 June 2016
TARGET2 is a payment system owned and operated by the Eurosystem. It is the leading European platform for processing large-value payments and is used by both central banks and commercial banks to process payments in euro in real time.
Modern economies rely on the safe and efficient flow of transactions. Payment systems provide the plumbing that allows money to flow in the economy. TARGET2 is a payment system that enables EU banks to transfer money between each other in real time. This is known as real-time gross settlement (RTGS).
The ECB has a keen interest in ensuring that payment systems and other market infrastructures function smoothly and effectively, to maintain financial stability in the euro area. This makes TARGET2 a key building block of financial integration in the EU. It enables the free flow of money across borders and supports the implementation of the ECB’s single monetary policy.
The platform is owned and managed by the Eurosystem. Put simply, it works as follows:
EU central banks and their national communities of commercial banks. More than 1,700 banks use TARGET2 to initiate transactions in euro, either on their own behalf or on behalf of their customers. Taking into account branches and subsidiaries, more than 55,000 banks worldwide (and all their customers) can be reached via TARGET2.