1 Feb 2012

TARGET2 : €593.2 trillion euros in 2010

Looking at the ECB data, it's clear that one of the biggest players is TARGET2 which is the real-time gross settlement (RTGS) system owned and operated by the Eurosystem. TARGET stands for Trans-European Automated Real-time Gross settlement Express Transfer system.

You can download the Target Annual Report for 2010 here.

The report includes numbers such as the total volume of transactions which was €593,194 billion - up from €551,174 billion in 2009. It will be interesting to see the numbers for 2011, which I imagine will be even higher.

The report notes that "interbank transactions accounted for a vast majority of the system’s turnover, at a share of 94%, with the remaining proportion being made up of customer transactions." We also learn that
  • the average value of a TARGET2 transaction was €6.7 million;
  • two-thirds of all TARGET2 payments (i.e. 65%) had a value of less than €50,000 each; 11% of all payments had value of over 1 EUR million;
  • the peak in turnover was on 30 June 2010, with 504,124 transactions with a value of €3,673 Billion.
  • TARGET2’s share in total large-value payment system traffic in euro was 90.5% in value terms and 59.9% in volume terms; 
  • 99.74% of TARGET2 payments were processed in less than five minutes. 
There is a strong concentration of transactions in five players. Germany accounts for 36.0%, followed by France (15.9%), Spain (14.9%), the Netherlands (13.1%) and Italy (5.6%). The UK, incidentally, has never joined, preferring to have its own systems. I suspect that they probably decided that it would be easier to keep their transactions away from an EU-imposed Financial Transaction Tax.

Sounds like putting a 0.1% FTT on all Target2 transactions would be a very good way of generating revenue. Imagine what could be done with nearly €600 billion of revenue. 

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