The “TARGET2/T2S Consolidation” project was launched by the Eurosystem back in 2017. The goal was and is to modernize the existing market infrastructure of the Eurosystem, leverage potential and increase the integration of the European financial market. In addition, the modernization ensures increased protection of the system against attacks from outside.


Key elements of T2/T2S consolidation are:
  • Separation of classic individual payments from central bank operations
  • Introduction of a central liquidity management with a new user interface
  • Comprehensive introduction of the ISO 20022 message standard for RTGS and central liquidity management

In summary, the payment transactions of all participating banks are undergoing extensive change. Technical components such as IT infrastructures, IT systems, IT interfaces, etc. and technical business processes such as payment instructions, money laundering checks and compliance must take the new requirements into account.

After the project was officially launched by the Governing Council on December 6, 2017, it was originally scheduled to go live in November 2021. The COVID-19 pandemic and the postponement of the SWIFT ISO 20022 migration led to the Governing Council postponing the start of operations by one year. The new target date is now November 21, 2022, which all banks are working hard towards.

Due to the large number of participating and thus projecting banks (in Germany there are at least around 1,200 institutions), the ECB regularly queries the general mood within the participating banks in Europe. This “Community Readiness Monitoring” is carried out on behalf of the ECB by the national central banks both at the systemically important institutions of the respective country, the “Closely Monitored Participants” (CMPs) and the other participating institutions “Regularly Monitored Participants” (RMPs). In addition to a questionnaire, the institutes can use a “traffic light system” to indicate their project status and their expectations for the coming quarter.

In Germany, at the beginning of the second quarter, the mood of the first quarter of 2021 was surveyed, consolidated and then evaluated. The exact results were published in the 46th edition of the Bundesbank Payment Transactions Newsletter on June 23 and are only briefly summarized here.

Compared to the previous year, the mood among German credit institutions is somewhat more pessimistic about a successful migration in November 2022. This can be seen from the increased number of yellow reports from the institutes.

This is mainly due to resource bottlenecks, dependencies on third parties, waiting for documents that have not yet been published (e.g. User Detailed Functional Specifications Version 2.2) and uncertainties due to the ongoing pandemic situation.

A positive aspect is that the planned milestones for the first quarter were almost completely completed by both the CMPs and the RMPs. On the other hand, the opinion of the banks regarding the achievement of the milestones in the second quarter is divided.

The individual companies see the connection to the network service provider (SWIFT or SIA-Colt) as less critical than the timely completion of the software development for the necessary adjustments to RTGS, CLM and the common components. If you take a closer look at the traffic light, you can see that there are several color gradations and interpretations for “yellow” and “red”. The Bundesbank reports that institutions have increasingly chosen an agile project approach and that there are therefore discrepancies between the internal sprint plans and the external milestones of the Bundesbank. We can also observe this. Gravning accompanies two institutes in the T2/T2S consolidation; one house in agile project planning and one in the classic project approach. These different types of planning alone make it difficult to compare the project status. Due to the size of the project, some institutes then opt for a yellow message rather than a green message.

For the upcoming milestones this year, the Bundesbank emphasizes the importance of the test activities and emphasizes the start of the user test on December 1st, 2021.

In preparation for this, the participants should have completed their internal tests of the key functionalities by August 31, 2021. The IT systems should be able to enable the connection to RTGS, CLM and the common components. This is followed by the test activities ( connectivity tests ) between the banks and the various parties involved. The connectivity tests phase enables the institutes to establish a network connection to the pre-production test environment (UTEST) via the ESMIG gateway.

By November 30th, 2021, a successful connection via U2A and/or A2A must be proven by the directly connected banks. Institutions that will not be directly connected to TARGET2 must confirm that their partner has successfully connected to the test environment.

This year concludes with the start of user tests on December 31, 2021. Central banks and their participants will participate in the user testing phases scheduled until 09/30/2022, which will include software testing, execution of prescribed test cases for the migration weekend, business day testing, operational testing and special testing scenarios.

There is still a lot to do before the Big Bang in November 2022. It will be particularly exciting in the second half of this year, when a possible fourth wave of COVID-19 could make project work more difficult again, leading to increased case numbers and thus possible restrictions in social interaction.


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