The role of the Eurosystem is to promote the smooth operation of payment and settlement systems. The Eurosystem understands the importance of business continuity through payment securities settlement systems infrastructure and central banks’ responsibilities around this. Payment and securities settlement systems infrastructure ensures the financial system stability of a country’s economy is improved, enabling effective and uninterrupted operations, irrespective of challenging circumstances.
The Eurosystem also provides ongoing support around both monetary policy operations, and oversees payments securities settlement systems.
Financial stability via the Eurosystem comes via co-operation, and information sharing between the national central banks and the European Central Bank. The T2S, a pan-European service, allows central securities depositories to settle securities transactions using central bank money.
Implementation of the single monetary policy tasks and development of international payment and securities settlement system infrastructures comes from operating a large-value payment system in Euro, for example, TARGET2 (Trans-European Automated Real-Time Gross Settlement Express Transfer) and the CCBM (The Correspondent Central Banking Model), a mechanism allowing the cross-border use of collateral.
The Eurosystem has established oversight policies and corresponding standards for large-value payment systems, retail payment systems and payment instruments, clearing systems, securities settlement systems and certain third-party service providers. It also oversees activities for these infrastructures, assessing their compliance with such policies and standards and, where necessary, stimulates change.
The Eurosystem also monitors and, where necessary, develops a position on market developments and legal initiatives affecting the overseeing of infrastructures and arrangements for payments, clearing and securities settlement. As a catalyst for change, it promotes efficiency in payment systems and, in with regards to retail payments, migration to the Single Euro Payments Area.
Finally, the Eurosystem promotes an efficient securities market through harmonising market standards and encouraging the removal of barriers to integration.