The Riksbank wants to use the Eurosystem’s T2 and TARGET2-Securities platforms
News The Executive Board of the Riksbank has decided that the preferred direction going forward is to use the Eurosystem’s platforms for settlement of payments and for securities settlement, T2 and TARGET2-Securities (T2S), respectively, for payments in Swedish kronor. This decision is based, among other factors, on increasing internationalisation, where banks and other agents are active on several markets. This leads to increased requirements to harmonise and to use common standards. Moreover, the general development leads to greater demands for security, in particular cyber security. This will require substantial resources.
As several central banks share technical platforms, costs and resources for development, operation and security can be shared among more parties, creating opportunities for efficiency gains through economies of scale. Sharing a platform with other central banks is also a further step towards fully achieving the benefits of harmonisation, such as freer movement of capital and lower barriers for cross-border payments and securities trading. In addition, a high level of cyber security is even more important, as the effects of an attack can be very extensive. This means that the requirements regarding security and robustness in the systems increase. It is costly for an individual country like Sweden to attain the same degree of security on its own, compared with when several share the costs.
The Executive Board judges that the advantages of sharing a platform outweigh the reduction in direct influence on development issues that ensues from sharing a platform with others. Influence in these questions will instead have to be exercised by taking part in the Eurosystem’s forum for governance and development.
Protective security and contingency solution important
One prerequisite for using the Eurosystem’s platforms is that the requirements of Swedish protective security legislation can be met. Robust contingency procedures and a contingency solution for the settlement of payments in Swedish kronor in Sweden are important components in this assessment.
On condition that the questions concerning protective security and contingency procedures can be resolved, the assessment of the Executive Board is that using the Eurosystem’s platforms would offer substantial advantages and efficiency gains for Sweden.
The next step in the Riksbank's work on platform sharing with the Eurosystem will be in-depth analyses regarding T2 and T2S. This work will involve the Riksbank having a dialogue with the participants in the Riksbank's payment system, as well as with the central securities depository and the Swedish securities market’s participants.