The role of the Eurosystem


One of the Eurosystem’s basic tasks is "to promote the smooth operation of payment systems" (Article 3.1 of the Statute of the European System of Central Banks and of the European Central Bank). The legal basis for the Eurosystem’s competence in the area of payment and settlement systems is contained in Article 127(2) of the Treaty on the Functioning of the European Union.

According to Article 22 of the Statute of the European System of Central Banks and of the European Central Bank, “the ECB and the national central banks may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems within the Union and with other countries”.


The safe and efficient functioning of market infrastructures for payments, securities and derivatives is an important element of a sound currency and is essential to the conduct of monetary policy and for the maintenance of financial stability. The Eurosystem has a keen interest in the prudent design and management of market infrastructures operating in its currency.


In promoting safety, the Eurosystem aims to ensure systemic stability in payment, clearing and settlement systems. Such systems are exposed to a wide range of risks, including legal, financial (i.e. credit and liquidity) and operational risks. In certain circumstances, these risks can become systemic. Systemic risk describes a disruption or failure affecting one participant or system which can lead to failures by other participants or interdependent systems.

Systemic risk mitigation is essential in order to ensure the smooth functioning and stability of payment, clearing and settlement systems, to safeguard the transmission channel for monetary policy and to maintain the stability of, and confidence in, the financial system and the economy as a whole.

Payment instruments, such as payment cards or credit transfers, and the rules applied to them by the relevant payment scheme, form an essential part of the payment system. Although risks in the provision and use of payment instruments are not systemic, the Eurosystem cares about the security of the payment instruments used by the general public. Only secure payment instruments promote confidence in the currency.


Complementing its objective of ensuring systemic stability, the Eurosystem aims to promote the efficiency of payment, clearing and settlement systems.

The setting-up and running of payment, clearing and settlement systems take up considerable resources. System operators need to be aware of the costs of their systems and the fees they charge their participants. Cost constraints may require choices to be made which will have an impact on the system’s functionality and safety. Public involvement may be required to ensure that participants and operators are given the right incentives to act prudently, avoid risk and minimise the overall cost to society.


Operator role

As the owner and operator of a payment or settlement system, the Eurosystem has immediate and powerful tools to ensure the safety and efficiency of the system. Many central banks which are now part of the Eurosystem have traditionally played an operational role in the field of payment and settlement systems.

The Eurosystem assumes its operational role whenever safety and efficiency concerns are particularly strong. This is true for:

  • TARGET2 (the real-time gross settlement (RTGS) system for the euro);
  • CCBM (which allows the cross-border transfer of collateral in Eurosystem credit operations);
  • TARGET2-Securities (a service for the integrated settlement in central bank money of securities transactions).

Oversight role

The Eurosystem defines the oversight of payment, clearing and settlement systems as a central bank function. In order to meet the oversight objectives of safety and efficiency, it monitors existing and planned systems, assesses them against these objectives and, where necessary, fosters change. The Eurosystem includes payment instruments, such as payments cards and credit transfers, as part of its oversight activities as these are an integral part of the payment system.

The basic principles of the Eurosystem’s oversight policy reflect internationally recognised standards. The details are adjusted to the specific conditions and needs of the Eurosystem and the euro area.

Catalyst role

The Eurosystem uses its expertise as well as contacts with the private sector and other public authorities to improve overall market efficiency.

The Eurosystem is keen to help the industry find safe and effective payment, clearing and settlement solutions for the euro area. An important example of the Eurosystem’s catalyst work is its contribution to the creation of the Single Euro Payments Area (SEPA). Another example is its contribution to the work on the removal of existing barriers to improve securities clearing and settlement in Europe.