STEP2

Processing, objectives and functions of the Bundesbank's participation

Processing cross-border euro payments via the Bundesbank's RPS

The Euro Banking Association (EBA) is a provider of clearing and settlement services which, with STEP2, offers a clearing system for settling euro payments between countries in the EEA (= EU countries plus Iceland, Liechtenstein and Norway). This covers credit transfers of up to €50,000 which indicate a valid IBAN (International Bank Account Number) for the beneficiary, a valid BIC (Bank Identifier Code) for the beneficiary's bank and the charge code "SHA" (shared) and thus satisfy the requirements of the EU pricing regulation.

On 3 November 2003 the Bundesbank connected its RPS to the STEP2 system of the EBA. Since then STEP2 payments can be submitted via RPS but only without restrictions if in the receiving country a STEP2 participant is available as "entry point" bank. Contrary to this general rule, payments can also be submitted via RPS for countries without an "entry point" bank in case the beneficiary holds an account with a bank which is already connected to STEP2. These countries/credit institutions which can be addressed via STEP2 are made public by the Bundesbank and can be inquired at the account-keeping branch.

Objectives

By participating in the EBA's STEP2 system the Bundesbank is making a major contribution to the standardisation, reduction of processing times and cost-effective settlement of cross-border credit transfers within the EEA. This is in line with the objectives of the European Commission, the European Parliament and the ESCB. However, the Bundesbank is seeking to play only a complementary role and, in particular, sees itself as a service provider for public authorities and smaller credit institutions.

The role of the Bundesbank

The Bundesbank acts as a direct STEP2 participant. As a direct participant, the Bundesbank offers its customers the possibility of indirect participation. Acting as an intermediary, the Bundesbank submits outgoing payments from indirect participants to STEP2. It accepts and forwards incoming payments for indirect participants.

In addition, the Bundesbank - along with other institutions - acts as a national "entry point" for Germany. In this case it delivers STEP2 payments to institutions in Germany which participate neither directly nor indirectly in STEP2 via its RPS.