Payment systems

SEPA - The Single Euro Payments Area

TARGET2

TARGET2-Securities

The Bundesbank’s role in cashless payment operations

Things are changing in the payments world. The driving forces are competition, cost pressure and the medium-term enlargement of the euro area – not to mention technological advances leading to new products, procedures and infrastructures.

What does this mean for the Deutsche Bundesbank? How does it affect its payments strategy and policy?

Section 3 of the Bundesbank Act “The Deutsche Bundesbank, being the central bank of the Federal Republic of Germany, is an integral part of the European System of Central Banks (ESCB). It shall participate in the performance of the ESCB’s tasks with the primary objective of maintaining price stability, (...) shall arrange for the execution of domestic and cross-border payments and shall contribute to the stability of payment and clearing systems.”

The Bundesbank sees itself as beeing in partnership with the banking industry. Through active participation and ongoing dialogue with the banking industry, the Bundesbank promotes efficient and secure payment transactions within Germany and in the developing single European payments area.

The Bundesbank has a vital function in the provision of clearing and settlement services. The focal point of its operational role is to create market infrastructures for the banking industry.

At the policy-making level, the Bundesbank is involved, as part of the European System of Central Banks (ESCB), in the ongoing development of European payment services, such as the drive towards greater standardisation, and thus helps to boost efficiency in the field of European payment transactions. It also presents its views on global payment and securities settlement issues at the G10 level.

Overseeing payment systems is one of the Bundesbank’s fundamental tasks and makes an important contribution to maintaining and strengthening the stability of the financial system. The Bundesbank’s activities range from monitoring compliance with international oversight standards, through observing developments in the payment field and maintaining contact with market participants, to working on joint ventures with other central banks and banking supervisors.

Responsibility for efficiency and security, support for payment system innovations

The Bundesbank pursues these strategic objectives by

• operating its own high-performance, competition-neutral interbank payment systems,
• continuously improving its own range of payment services,
• working with the banking industry and other central banks to develop efficient payment structures in Europe,
• carrying out the oversight function as well as monitoring, analysing and evaluating developments in payment and settlement systems, and
• participating actively in the work of international committees.