Money and payments
3.4 Bank of Finland contributes to development of payment and settlement systems and collateral management services
The Bank of Finland provides payment system and collateral management services for its counterparties and participates in the development of these services.
The Bank of Finland provides payment system services through its TARGET2 component TARGET2-Suomen Pankki, in which a total of 24 financial institutions operating in Finland and the other Nordic countries held an account at the end of 2019.
Number of transactions settled via TARGET2-Suomen Pankki increased, but value decreased
The average daily number of payments settled via the TARGET2-Suomen Pankki system was 2,060, with an average aggregate value of EUR 45 billion per day. The daily number of transactions increased by 24%, while the value of transactions decreased by 6%.
Finland's share of the payments settled via TARGET2 was 0.60% in terms of transaction numbers and 2.27% in terms of aggregate value. In addition to TARGET2 services, the Bank of Finland provides banks with dedicated cash accounts in TARGET2-Securities for securities settlement purposes.
The Bank of Finland participates actively in the update of systems
In addition to standard production activities, systems are updated and developed on an ongoing basis. The Bank of Finland participated actively in 2019 in the central bank testing of the new version of TARGET2 and coordinated testing with its TARGET2 participants.
In addition to payment system services, the Bank of Finland, via its BoF-CMS-Cola system, manages the collateral for central bank credit operations. A significant update was introduced into the system in 2019 when the management of credit claims pledged as collateral by the Bank of Finland counterparties was connected to the system.
TARGET2 and TARGET2-Securities to consolidate in 2021
The Bank of Finland participates in the Eurosystem's market infrastructure projects and supports its counterparties in the migration to the new services.
The project to consolidate TARGET2 and TARGET2-Securities progressed according to plan in 2019. The market participants are stepping up their preparations for introduction of the new system, in cooperation with the central banks.
In the project, the current TARGET2 will be replaced with a new real-time gross settlement (RTGS) system. The project also involves an update of rules and practices applied in the system. The new system will be launched towards the end of 2021.
Development of the Eurosystem Collateral Management System progressing on schedule
Development of the new Eurosystem Collateral Management System (ECMS) progressed on schedule in 2019. The system's launch is planned for 2022.
The purpose of the project is to move to a unified system in the management of assets used as collateral in Eurosystem credit operations.
In addition to central banks, their counterparties for monetary policy operations and central securities depositories located in the euro area and participating in TARGET2-Securities will also migrate to the new system.