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Integration of Payment Services in Europe and Consolidation<br />
of Cash Distribution Structures in Austria<br />
TARGET2<br />
pricing model<br />
OeNB sets up<br />
national TARGET2<br />
migration team in<br />
cooperation with the<br />
banking industry<br />
TARGET2 road map<br />
their euro liquidity. The new intraday<br />
liquidity pooling feature will enable<br />
banks based in the euro area to monitor<br />
their accounts held with Eurosystem<br />
central banks from a single master<br />
account. Euro area banks will be<br />
able to group individual accounts<br />
and pool the available intraday liquidity<br />
for the benefit of all members of<br />
the group of accounts. This could reduce<br />
banksÕ need to have recourse to<br />
intraday credit.<br />
In addition to the higher level of<br />
service, TARGET2 will be based on<br />
a state-of-the-art business continuity<br />
concept ensuring that in the event<br />
of wide-scale regional disruption<br />
transactions will be processed via another<br />
country.<br />
With a view to the transition to<br />
TARGET2, the OeNB formed a national<br />
migration team (NMT) in<br />
May <strong>2004</strong>. In close cooperation with<br />
Austrian banks, the NMT evaluated<br />
TARGET2 functionality and efficient<br />
ways of connecting the Austrian financial<br />
marketplace to the SSP.<br />
Starting from January 2, 2007,<br />
TARGET users are scheduled to migrate<br />
to TARGET2 in waves at several<br />
predefined dates. Each Òmigration<br />
windowÓ will consist of a group of national<br />
banking communities, includ-<br />
Total Value of Euro Banknotes and Coins in Circulation<br />
EUR billion<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
0<br />
2002<br />
Banknotes<br />
Coins<br />
2003 <strong>2004</strong><br />
Source: ECB.<br />
ing the central bank and commercial<br />
banks. The current RTGS systems<br />
and the SSP will coexist during the<br />
migration phase. The individual EU<br />
countries will be grouped for migration<br />
in a way which minimizes project<br />
risk.<br />
Two pricing models are likely to<br />
apply to TARGET2. Participants will<br />
be able to choose between transaction<br />
fees only and lower transaction<br />
fees plus a periodic fee.<br />
The dual pricing scheme should<br />
permit recovery of a very large part<br />
of the total TARGET2 costs. The<br />
fee per transaction will range from<br />
EUR 0.25 to EUR 0.80; separate<br />
fees will be charged on optional<br />
TARGET2 functions, such as the<br />
liquidity pooling feature.<br />
The OeNBÕs Regional<br />
Network Ensures Smooth<br />
Cash Supply and Cash<br />
Handling<br />
At year-end <strong>2004</strong>, a total of 9.7 billion<br />
euro banknotes (equivalent to<br />
EUR 501.3 billion in value terms)<br />
and 56.2 billion euro coins (EUR<br />
15.4 billion) were in circulation. This<br />
compares with 9 billion euro banknotes<br />
(EUR 436.1 billion) and 49 billion<br />
euro coins (EUR 14.1 billion) at<br />
54 ×<br />
<strong>Annual</strong> <strong>Report</strong> <strong>2004</strong>
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