ANNUAL REPORT 2008 - Polymer Bank Notes of the World

and the ECB). As a result of careful monitoringby the central banks, all related testing activitieswere completed successfully and on time for alluser communities. Between November 2007 andMay 2008, procedures were in place to ensurethat those user communities which had a latermigration date (and were therefore still operatingin the first-generation TARGET system) couldinteract effectively with the user communitiesalready connected to the SSP of TARGET2. Thesix-month migration process was very smoothand did not cause any operational disruptions.TARGET OPERATIONSThe TARGET system functioned smoothlyin 2008 and continued to settle an increasingnumber of euro payments. The system’s marketshare was stable, with 90% of the total value ofpayments in euro large-value payment systemsbeing executed via TARGET. The averagenumber of payments processed by the TARGETsystem each day increased by 1%, to 369,966,while the average value rose by 10%, to €2,667.On 22 December 2008 TARGET reacheda peak of 576,324 transactions, which is anall-time high for the system. Table 11 providesan overview of the payment traffic in theTARGET system in 2008, comparing it with thetraffic in the previous year.The overall availability of TARGET, i.e. theextent to which participants were able to use theTARGET system during their business hourswithout incident, reached 99.79% in 2008. It isnoteworthy that this is the highest figure sincethe start of TARGET operations in 1999 andthat the migration to TARGET2 did not haveany negative effects on the system’s availability.More than 99.76% of the payments on the SSP ofTARGET2 were processed within five minutes.The feedback from TARGET2 users on thesystem’s performance has been very positive.By December 2008 900 direct participantsmaintained an RTGS account on the SSP ofTARGET2. This figure is lower than the 1,072direct participants which had accounts in the firstgenerationTARGET system at the start of themigration. There are two main reasons for this.Table 11 Payment traffic in TARGET 1Volume (numberof transactions) 2007 2008Change(%)OverallTotal 93,375,701 94,711,380Daily average 366,179 369,966 1.03Intra-Member State 2Total 72,574,446 69,212,880Daily average 284,606 270,363 -5.00Inter-Member StateTotal 20,801,255 25,498,500Daily average 81,574 99,604 22.10Value(EUR billions) 2007 2008Change(%)OverallTotal 616,731 682,780Daily average 2,419 2,667 10.28Intra-Member State 2Total 395,412 466,572Daily average 1,551 1,823 17.54Inter-Member StateTotal 221,319 216,208Daily average 868 845 -2.69Source: ECB.1) There were 255 operating days in 2007 and 256 operatingdays in 2008.2) Includes the traffic of remote participants.First, a number of credit institutions reconsideredtheir direct participation at the time of theirmigration and opted instead to connect indirectlyvia a direct participant. Second, TARGET2created strong incentives for banks to rationalisetheir euro liquidity management and to centraliseit in fewer RTGS accounts. The overall numberof banks (including branches and subsidiaries)that can be addressed worldwide throughTARGET has remained stable at some 52,000.RELATIONS WITH TARGET2 USERSDuring its development, TARGET2 benefitedgreatly from the active cooperation between theEurosystem and the future users of the system.This considerably improved the understandingof market requirements and was instrumental inensuring a smooth migration process and highlevels of acceptance of the system by the users.This cooperation continued beyond themigration phase. The Eurosystem maintainsclose relations with TARGET2 users andregular meetings were held between the euroECBAnnual Report2008113