The European Central Bank has warned the banking community to pick up the pace in the delivery of standards for cross-border payments processing, or face more burdensome regulation.
As of 1 July 2003, under EU legislation designed to usher in a Single Euro Payments Area (Sepa), banks are obliged to charge the same fees for national and cross-border credit transfers.
In a progress report published today, the ECB cautions that the banking sector still has considerable work to do to build the infrastructure necessary to supply Regulation-compliant services cost-efficiently.
The European banking sector has formulated a strategy to create a Sepa within which there is no difference between the levels of service for national and cross-border retail payments by 2010. The banks have agreed on a preferred infrastructure for the processing of cross-border retail payments in euro and have adopted conventions for basic cross-border credit transfer services.
In several areas, however, the milestones along the road to a Sepa still require more precise specification, says the ECB.
"The implementation of standards for cross-border payments lags behind banks’ own commitments," says the central bank.
It intends to measure progress on the basis of specific indicators, on which it urges the banks to continuously report.
The ECB describes its current role as a catalyst for change, an "active observer" of the banking sector's work.
But it adds: "Should the banking industry be unable to make sufficient progress towards a Sepa, however, the Eurosystem may step up its involvement, using its regulatory tools more actively."