The Target2 Securities (T2S) system was conceived by the ECB as a mechanism for cutting cross-border trading costs through the creation of a streamlined pan-European platform for securities settlement against central bank money.

However, it became apparent towards the end of last year that the complex project was foundering in the face of resistance from market participants.

Speaking at the Sibos conference in Hong Kong in October, Jean-Michel Godeffroy, chairman of the T2S programme board admitted that there had been a seven-month delay to the completion of General Functional Specifications document, which outlines the technical requirements for the T2S system and that other challenges, over pricing and governance had yet to be addressed.

By early January it became apparent that the project would need to be delayed by at least a year to 2013.

In a quarterly review published by the ECB, Goddefroy has officially confirmed the deadline over-run, saying that the project has been hampered by both external and internal issues. The latter relates to the "complex organisation" of the T2S company which entails serpentine connections between the ECB and the four central banks chosen to run the project.

"In the last few weeks, we have started carefully reviewing our current organisational set-up and checking that the problems that have been identified have been properly addressed," says Goddefroy. "Although this is a difficult time, I believe that it will, in the end, strengthen our organisation for the future."

Goddefroy is reluctant to commit to a new go-live date until the review is completed. "We now want to make sure that we can set a new go-live date and stick to it," he says. "We know that market participants need a firm date in order to plan their own system adjustments. We are therefore in the process of coming up with a new date to open T2S to business; a go-live date which will not be challenged again."