1. TARGET2 The RTGS system for the euro

2. 2 TARGET2 Three years of operations Getting ready for T2S Strategic developments

3. 3 TARGET2 Three years of operations Volume Value In 2010… €593 trillion settled (€2.3 trillion daily) 88.6 million transactions (343,000 daily) TARGET2 traffic taking 1999 as a reference In 2010… One of the biggest LVPS in the world 90% market share in euro LVPS Comparison with other LVPS daily turnover in € billion equivalent

4. 4 TARGET2 Three years of operations In 2010… 24 banking communities connected 60,000 reachable institutions worldwide Incidents Availability In 2010… 100 % technical availability 99.74% of payments settled < 5 min May-08 Dec-10 Participation System’s performance

5. 5 After three years of operations… Smooth functioning of the system High level of customer satisfaction Regular dialogue with the users on system’s enhancement … time to think about strategic developments TARGET2 Three years of operations

6. 6 TARGET2 Three years of operations Getting ready for T2S Strategic developments

7. 7 RTGSDCA CSD 1 CSD 2 CSD n CSD 3 CSD 1 CSD 2 CSD n sub a/c 1 RTGS sub a/c 2 RTGS CSD 3 sub a/c 3 TARGET2 Getting ready for T2S Changes triggered by T2S (cash side)

8. 8 TARGET2 Getting ready for T2S Fragmentation of participants’ liquidity due to the multiplicity of sub-accounts. Auto-collateralisation in few CSDs and with RTGS account opened with the ‘local’ NCB. Multiplicity of the settlement procedures. Strong operational dependence between CSDs and TARGET2. Rationalisation of banks’ liquidity management (possibility to have one single DCA for settling in all CSDs). Auto-collateralisation available with all CSDs where the eligible securities are held. One single interface for all CSDs hosted by T2S. Large operational autonomy thanks to auto-collateralisation. +

9. 9 Banks’ challenge (cash side) Monitor and consolidate their cash position in real time Shift liquidity quickly wherever it is needed Use the same technical interface for managing both their DCA and their RTGS accounts T2S is exclusively based on ISO20022 TARGET2 is not yet using ISO20022 Not all TARGET2 participants will be ready to move to ISO20022 for cash management TARGET2 Getting ready for T2S Central Bank Money RTGSDCA Banks wish to… … while BANK

10. 10 Alternative interface (legacy standards) Access to the main DCA features via TARGET2: Intraday balance on the DCA Liquidity shift (push and pull) End of day statement for the DCA Eased access to the T2S GUI for other features Converted by TARGET2 Optional offer Legacy standards Conversion by TARGET2 Central Bank Money TARGET2 Getting ready for T2S Eurosystem’s offer for TARGET2 (cash side) RTGSDCA ISO20022 compliant interface Access to RTGS related features via TARGET2 using a new ISO20022 compliant interface. Access to DCA related features via the regular T2S ISO20022 compliant interface. Standard offer ISO20022

11. 11 TARGET2 Three years of operations Getting ready for T2S Strategic developments

12. 12 TARGET2 Strategic developments Migration to ISO20022 Cornerstone in the development of TARGET2 Benefits in terms of efficiency and interoperability. Synergies with other projects in Europe and worldwide. Step-by-step implementation of ISO20022 in TARGET2. Flexible coexistence of legacy and ISO20022 standards. Discussions with users’ community. WHY ? HOW ? WHEN ?

13. TARGET2 The RTGS system for the euro