The European Central Bank believes the implementation of an integrated securities settlement system in the euro zone could cut settlement costs by up to 90%.
Feasibility studies published by the ECB suggest that the central bank will push ahead with plans to implement an integrated settlement infrastructure, dubbed Target2-Securities, despite scepticism about the scheme from market participants.
In current market conditions, settlement transactions costs would fall to 28 cents if the system was in place, says the study. Settlement activities currently cost at least 45 cents in the euro zone and as much as EUR2.80 in Greece.
The ECB system would connect all clearing networks in the euro zone into a single platform, extending the payments system used for central bank operations to cover securities settlements. Such a scheme would supplant services currently provided by securities depositories such as Clearstream and Euroclear.
The ECB's governing council will make a final decision on implementing the system in late February. If approved the Target2-Securities platform could be operational in 2013.
Read the ECB's feasibility study here:Download the document now 340.6 kb (Adobe Acrobat Document)