Until February 15th 2008, the French National Payment system consisted of two large-value payment systems: TBF (Transfert Banque de France), the French component of TARGET (Trans-european Automated Real-time Gross settlement Express Transfer system) and an hybrid system PNS (Paris Net Settlement). Since then, these two systems have been replaced by TARGET2-Banque de France, the single French large value payment system.

TARGET2-Banque de France is the French component of TARGET2. It is hosted on a single shared platform which ensures the technical management of financial institutions accounts open on the books of participating central banks. Relationships between national central banks and their banking community remain decentralised.

When TARGET2 was designed, European banks stressed the importance of selecting effective and user-friendly liquidity management features to limit the amount of liquidity needed to settle a given payment amount or to optimise the use of available liquidity. Because TARGET2 is based on a shared technical platform – the SSP – institutions with locations in more than one European country can maintain accounts with the central bank(s) of their choice and manage their liquidity on a consolidated and real-time basis from a single point.

This marks a major change from the previous arrangements. It allows banks to manage their business – and that of their subsidiaries and branches – from one place only, allowing them to optimise the organisation of their back-offices and to centralise their liquidity management.

This major progress related to TARGET2 liquidity management has been followed in France by an overhaul of collateral management procedures for intraday credit and monetary policy operations. The go-live of the 3G project on 18th February 2008 has provided the French banking community with an efficient tool to manage all ESCB eligible collaterals included credit claims in a single pool of collateral.

Moreover, as far as liquidity management is concerned, France benefits from an extremely efficient delivery versus payment system which allows simultaneous settlement of securities and cash legs of transactions in ESES-France – the securities settlement system managed by Euroclear France. A permanent liquidity bridge between ESES-France and TARGET2-Banque de France also allows liquidity transfers initiated by participants between these two systems at any moment during the operating day. Besides, these liquidity transfers are also possible, at a given schedule, to supply liquidity to ESES-France prior to its night-time settlement cycle.

Last update : June 27, 2008