The pan-European system - called Target2-securities (T2S) - 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. The ECB believes an integrated securities settlement infrastructure in the euro zone could cut settlement costs by up to 90%.

But the plans have come under fire from market participants, including the European Central Securities Depositories Association (ECSDA) which argues that TS2 would supplant services currently provided by its members. Earlier this month The Federation of European Securities Exchanges (FESE) also voiced concerns over the cost implications of the project to its members and called for more clarity and a clear business case for the project.

However Europe's banks have come out in support of the scheme, although only on condition that they get more say in the design and implementation of the system, and that banks have direct access to T2S.

Despite on-going concerns from some quarters, the ECB is pushing ahead with plans to implement the system and is now launching a public consultation on T2S user requirements and the methodology for the assessment of the economic impact of the system.

The user requirements consist of a management summary and descriptions of the features, concepts and functionality of TS2. The methodology for the economic impact assessment describes the approach that the Eurosystem will adopt in order to calculate the costs, benefits and macroeconomic impact of T2S.

Market participants have until 2 April 2008 to submit comments. In May 2008 the T2S Advisory Group will assess comments received and a proposal for the final user requirements will be submitted to the ECB's governing council shortly afterwards. The council will decide on whether to push ahead to the next phase of the T2S project.

The public consultation documents can be found here.