Bloomberg News

ECB Says U.K., Switzerland Won’t Participate in Target2 Program

November 29, 2011

Nov. 29 (Bloomberg) -- The U.K. and Switzerland won’t participate in Europe’s planned Target2 Securities settlement platform, the European Central Bank said.

“In the last few months, the Bank of England and the Swiss National Bank have informed the Eurosystem that they will not participate in T2S with their national currencies -- at least at the beginning,” Jean-Michel Godeffroy, chairman of the TS2 Program Board, wrote in a quarterly review published on the Frankfurt-based ECB’s website today. He said this will not result in any change in pricing.

The settlements system for securities such as stocks and bonds is being set up by the ECB to consolidate the existing fragmented system in Europe. Godeffroy said the ECB’s Governing Council has approved the framework agreement for T2S, which promises to cut cross-border settlement fees by about 90 percent and is due to begin operation in September 2014.

The Bank of England has in the past complained that the T2S system would cede too much control to the ECB and that it wasn’t clear that the costs of setting up the platform would be fully recovered.

--Editors: Craig Stirling, Alan Crawford

To contact the reporter on this story: Matthew Brockett in Brussels at mbrockett1@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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