The ECB and Target 2 - Securities: questions on the legal basisOpinion delivered to the Economic and Monetary Affairs Committee of the European Parliament – Brussels. (2006)
AbstractThe current European system of securities’ clearing and settlement is still rather fragmented along national boundaries, thereby making cross border operations costly and less efficient. As a response to this, the European Central Bank (“ECB”) is launching the project of a centralized public securities’ settlement platform, called “Target 2 Securities” (“T2S”), which would entitle each participant to settle, through a single Target2 account, any securities’ transaction performed through a Central Securities Depository that provides for settlement in central bank money in Euro. The legal basis of T2S is to be found in Article 105 (2) of the EC Treaty and, more specifically, in Articles 17, 18, 22 and 23 of the ECB Statute. This paper is structured as follows. The first part briefly describes the background of T2S. Part two addresses the policy reasons supporting the ECB initiative. Part three discusses the legal basis for T2S. Part four discusses the trade-off between market-driven integration and public consolidation of securities’ clearing and settlement in the Eurosystem, also in the light of the “open market” and “free competition” principles set out in Article 105 of the Treaty. Part five briefly examines similar initiatives elsewhere, also looking at those promoted and managed by other Central Banks. Part six concludes with a few initial remarks on the extension of the legal framework of Target to T2S.
Publication DateDecember 4, 2006
Citation InformationMarco Lamandini. "The ECB and Target 2 - Securities: questions on the legal basis" Opinion delivered to the Economic and Monetary Affairs Committee of the European Parliament – Brussels. (2006)
Available at: http://works.bepress.com/marco_lamandini/15/