Upload
alaina-morris
View
221
Download
0
Tags:
Embed Size (px)
Citation preview
1
ABE EBA
Oct..2003
STEP2
A Pan-European ACH
for the Single Euro Payments Area
Payment Systems Conference, Budapest, 9th October 2003
2
ABE EBA
Oct..2003
• STEP2 objectives, benefits and participation
• High-level overview of EURO1 and STEP1
• EBA history and background
Overview
• STEP2 and SEPA
3
ABE EBA
Oct..2003
EBA was founded in 1985
• by 18 commercial banks and the European Investment Bank
• today : more than 190 members from all EU countries and
the US, Switzerland, Norway, Australia, Japan, China
Introduction
18 years of experience in
• operating a cross-border payment system with the BIS as
Settlement Agent (till end-1998) and the ECB (since 1999)• consensus building and decision making within a
pan-European, industry owned organisation
4
ABE EBA
Oct..2003
Successful migration to the euro
• development of the EURO1 and STEP1 system
• creation of EBA Clearing Company as operator of the
system, 74 EURO1 banks are shareholders• Association pursues its mission with further initiatives
Introduction
5
ABE EBA
Oct..2003
The EBA Group
EBA
Euro Banking Association
EBA
Euro Banking Association
EBA Clearing
Operator of EURO1/STEP1/STEP2
EBA Clearing
Operator of EURO1/STEP1/STEP2
EBA Administration S.A.EBA Administration S.A.
Introduction
6
ABE EBA
Oct..2003
The Euro Banking Association’s mission
Introducing EBA
• to serve as a forum for the practitioners in the euro payments industry
• to initiate further interbank cooperation arrangements in relation to payments infrastructure needs
• to carry out studies and research to increase the general knowledge and awareness of the euro payments industry
7
ABE EBA
Oct..2003
Introducing EBA Clearing
The mission of EBA Clearing
• to develop and implement processing arrangements for new pan-European payment schemes
• to ensure that services delivery conforms to the highest levels of cost-effectiveness, robustness and resiliency
• to facilitate the migration of the banks’ payment traffic from domestic to pan-European platforms
8
ABE EBA
Oct..2003
… a source of private sector initiatives for pan-European
payment infrastructures
The EBA
• a meeting place of practitioners
• capable of building consensus
• creating commitment
• delivering solutions
9
ABE EBA
Oct..2003
• STEP2 features, benefits and participation
• High-level overview of EURO1 and STEP1
• EBA history and background
Overview
• STEP2 and SEPA
10
ABE EBA
Oct..2003
EURO1 and STEP1
Two schemes for single payments processing,operated on one technical platformprovided by SWIFT
EURO1 Participants settle with
ECB, extend to each other
credit lines to create liquidity,
share risk, collateral
Processing of single payments
STEP1 Participants settle with
a EURO1 Settlement Bank,
liquidity is provided by the
Settlement Bank
EURO1
STEP1
11
ABE EBA
Oct..2003
EURO1 and STEP1
74 Direct Participants42 Sub-participants
Processing of single payments
>190 Direct Participants(incl. EURO1 Banks)
EURO1
STEP1
8000+ directly
addressable BICs
Two schemes for single payments processing,operated on one technical platformprovided by SWIFT
12
ABE EBA
Oct..2003
160 -
140 -
120 -
100 -
80 -
60 -
40 -
0 -x1000 Q1 Q2 Q3 Q4 Q1
2000 2001Q2 Q4Q3
Daily average value (EUR bn)
- 200
- 180
EURO1/STEP1 Traffic
2002Q1 Q2 Q3 Q4
Daily average volume (000)
2003Q1 Q2
13
ABE EBA
Oct..2003
Key facts
EURO1/STEP1 platform
Second-largest high-value system in the world in terms of volume
Includes all major players of the European payments industry
Evolution towards Flexible Settlement Capability
Settlement at the European Central Bank
14
ABE EBA
Oct..2003
• STEP2 features, benefits and participation
• High-level overview of EURO1 and STEP1
• EBA history and background
Overview
• STEP2 and SEPA
15
ABE EBA
Oct..2003
with proper pan-European arrangementsfor high-value payments,
The starting point
A new Single Currency Area …
- but deeply fragmented infrastructuresfor low-value payments,different standards andbusiness practices, legalenvironments
16
ABE EBA
Oct..2003
WHAT WEDON’T WANT
What infrastructure approach ?
17
ABE EBA
Oct..2003
… a truly pan-European platform !
What infrastructure approach ?
18
ABE EBA
Oct..2003
distribution of payment instructions to any bank operating in
the EU, no need to maintain routing tables for payments in EU
a pan-European ACH connecting directly or indirectly the banksfrom all EU countries
highly automated, based on new pan-E. standards and latest
technology, simple to operate, minimising bank internal costs
open to progressive integration of domestic traffic
integrated liquidity position for EURO1/STEP1/STEP2
STEP2 key features
19
ABE EBA
Oct..2003
Sending cut-off
D-122:00
Settlement cut-off
8:00
STEP2 processing cycle
Receiving files from
participants
Validation of files
and of instructions
Sorting per ad-
dressed participant,
creating reject file
Calculation
of bilateral
obligations
Generation of
settlement
payment orders,
transmission to
EURO1/STEP1
Processing of settlement
payments in
EURO1
Creation of
outgoing file for
each addressed
participant
Sending one
file to each
addressed
participant
D7:00
Files not settled are returned
Time line
20
ABE EBA
Oct..2003
1
file file
1
EURO1
11
funds
STEP2
STEP1
STEP2 Participation Modes
1. Direct Participants : Banks sending to and receiving from STEP2 files directly
21
ABE EBA
Oct..2003
2 1 1
EURO1
1. Direct Participants
2. Indirect Participants : banks in the EU that have appointed a STEP2 direct participant to receive files and funds on their behalf
STEP2
STEP1
STEP2 Participation Modes
22
ABE EBA
Oct..2003
3
3
3
EURO1
3. Other banks : Routing of payments to any other bank in the EU via STEP2 Direct Participants acting as Entry Points for a country
STEP1
file
Direct Participants
acting as countryEntry Point
STEP2
1
1
1
STEP2 Entry Point
1. Direct Participants
2. Indirect Participants
23
ABE EBA
Oct..2003
STEP2 ramp-up
Direct Participants in STEP2, since live date in April 2003
Banca IntesaBanco Bilbao Vizcaya ArgentariaBanco Commercial PortuguesBanco Espirito SantoBanco Popular EspañolBanco Santander Central HispanoBank Austria Creditanstalt Banque Fed. du Credit MutuelBarclays BankBCEECECACommerzbankCredit Commercial de FranceDeutsche BankDresdner BankEFG Eurobank
HSBCHypovereinsbankING BankING BelgiumJP Morgan Chase BankLa CaixaNational Bank of GreeceNordea Bank DanmarkNordea Bank FinlandRabobank NederlandSanPaolo IMISociété GénéraleSydbankUnicredito ItalianoWestLB
24
ABE EBA
Oct..2003
STEP2 ramp-up
Banks joining in October 2003 as Direct Participants
Banca Pop. Verona e NovaraBanca Popolare di MilanoBNP ParibasCaixa Geral de DepositosCapitaliaCaja MadridCredit AgricoleCredit LyonnaisCredito BergamascoDanske BankDen norske BankDeutsche Bundesbank
Dexia – BILFortis BankKBC BankNatexis Banques PopulairesÖsterreichische NationalbankSEBSwedbank
760+ Indirect Participants by the end of 2003
25
ABE EBA
Oct..2003
Declarationof interest
Briefingsessionsin EBA
Letter confir-ming interest
- 5months
- 2
Bank internal preparations
Completelegal andtechnicaldocumen-tation
- 1
Live
- 6
Test & trainingregistration
- 4
8 weeksscripted testing
STEP2 admission cycle
26
ABE EBA
Oct..2003
Joining windows in 2004
8 March5 July8 November
Indirect Participants join on a monthly basis
STEP2 admission cycle
27
ABE EBA
Oct..2003
STEP2 ramp-up
Receiver Capability as of 31/12/03
STEP2 Direct Participants in 14 EU countriesact as Entry Points to ensurecountry wide distribution of paymentscoming from STEP2
28
ABE EBA
Oct..2003
Country Entry Points Dir. Particip. as of Nov 03 as of Nov 03
Austria 2 2Belgium 1 3Denmark 3 3Finland 1 1France 2 7Germany 4 6Greece 2 2Ireland - -Italy 4 7Luxembourg 2 2Netherlands 1 2Portugal 3 3Spain 6 6Sweden + 2United Kingdom 1 3
STEP2 receiver capability
29
ABE EBA
Oct..2003
EU 25
Receiver Capability as of 31/12/04
STEP2 Direct Participants in 14 EU countriesact as Entry Points to ensurecountry wide distribution of paymentscoming from STEP2
30
ABE EBA
Oct..2003
• STEP2 features, benefits and participation
• High-level overview of EURO1 and STEP1
• EBA history and background
Overview
• STEP2 and SEPA
31
ABE EBA
Oct..2003
The Single Euro Payments Area !
Where do we have to go ?
32
ABE EBA
Oct..2003
Challenges and opportunities
• SEPA : a change of scale or changes of horizons ?
• En route to SEPA : which sort of business cases for abandoning domestic standards/infrastructures and creating new ones ?
• New infrastructures : the difficult balance between the need for consensus, the need for leadership and market driven consolidation.
• How equal are banks vis-à-vis - scale driven cost saving potentials ? - opportunities emerging from de-fragmentation and broadening business horizons ?
33
ABE EBA
Oct..2003
Step2 not only provides a solution for the future
pan-European mass payments processing …
STEP2 : a migration project
… Step2 also offers a variety of paths to individual
banks and bank communities for migrating their
traffic to PEACH !
34
ABE EBA
Oct..2003
Core Market Practice:
CommonStandards
MGS Type: MT103+Amount : € 12.500STP Beneficiary Account Identification: IBAN + BICGuaranted execution timeframeOthers . . .
STEP2 and EPC Concentric Model
ex.All the elements of the common standard codeMaintanined, except theamount : € 250.000 . . .
ex.Amount : € 250.000STP Beneficiary Account identification: BBAN (Clearing Code + Acc. number ex. RIB). . .
35
ABE EBA
Oct..2003
Innovation and value for SEPA
A new technology : InterAct and FileAct, SWIFT XML Standards for Bulk Payments
A new business platform : a pan-European ACH supporting the new pan-European payment instruments
A new customer proposition : low cost, secure and rapid payment services across Europe for retail customers
STEP2 key features
36
ABE EBA
Oct..2003
« ... the Pan-European Infrastructure WG should ensure that the following milestones are respected : ...
• By mid-2003, the pan-European infrastructure should be operational for cross-border STP compliant credit transfers.
• By mid 2004, 50% of current cross-border credit transfers volumes should be processed on the pan-European infrastructure as well as, potentially, domestic payments from countries with no ACH infrastructure.
• By mid-2005, the pan-European infrastructure should accommodate new Euro direct debit schemes. • By 2007, the agreed target service levels as defined should be met (e.g. same day settlement). »
STEP2 and SEPA
(Excerpts of S.E.P.A. Workshop report, March 2002)
The next steps …
37
ABE EBA
Oct..2003
Different blocks …
The EBA vision
forsettlement :
indirect
forprocessing:
paymentfiles,STPcredit&debit
directsinglepayments,same-day,STP andnon-STP,credit&debit
EURO1
STEP2
STEP1
38
ABE EBA
Oct..2003
EURO1
STEP2
STEP1
… one integrated offering
The EBA vision
39
ABE EBA
Oct..2003
Directsettlement
Indirectsettlement
Singlepayments
Bulkpayments
A broadly based clearing and settlement services provider
for processing single and bulk payments in euroopen to all financial institutions in the EU
The EBA Payments Processing Center
for the SEPA
The EBA vision
… one integrated offering
40
ABE EBA
Oct..2003
The EBA Payments Processing Center
www.abe.org