Ignazio Visco: The TARGET2-Securities Framework Agreement
Key statement by Mr Ignazio Visco, Governor of the Baml of Italy, at the event marking the
first signatures to the T2S Framework Agreement, Frankfurt am Main, 8 May 2012.
* * *
I am very pleased to be here today to sign, on behalf of Banca d'Italia acting in the name of
the Eurosystem, the Framework Agreement with Monte Titoli.
This is an important day for T2S, since this signature represents the achievement of one of
the crucial milestones of the project. We all know that the last two years of negotiations
between the Eurosystem and the European central securities depositories have not always
been simple and straightforward and I would like to thank the Programme Board and the
CSDs for the efforts they have made to reach a common consensus on such a relevant legal
act.
From now onwards the Eurosystem and the CSDs will have to jointly focus on making T2S a
reality. The Eurosystem will have to deliver T2S to the market according to schedule. The
CSDs will have to adapt their internal systems to the pan-European platform.
This is an important day not only for T2S but for the European financial community at large,
which can reap significant benefits from T2S. The reduction of settlement costs that will be
achieved thanks to the economies of scale which this project will bring about has the
potential to greatly enhance the competitiveness of our marketplace. Furthermore, by
harmonising the settlement process T2S will stimulate competition among CSDs and
between them and the large custodian banks. Perhaps even more important is the role that
T2S will play as a catalyst for further harmonisation of the European financial market, at a
time when the design of a new European CSD Regulation is striving to remove legal barriers.
We are therefore aware that a significant signal is being delivered today. It is a signal of
confidence in the importance of the area's financial integration, against some tendencies of
financial fragmentation that we are currently observing. Not so far is the day in which the very
concept of cross-border transactions in Europe will lose any meaning.
I am very pleased that the Italian banks and Monte Titoli have supported this project from the
very beginning. As a representative of the Eurosystem, let me congratulate in particular
Monte Titoli on its early decision to join T2S by migrating already in the first wave, a decision
that has greatly enhanced the chances of success of the project.
Now that hopefully all CSDs in the euro area will sign the Framework
Agreement by the end of June, the main challenge facing us is the implementation of a
sound governance of T2S, which has to involve in an appropriate way all stakeholders, i.e.,
market players, the Eurosystem and non-euro area central banks.
The aim is to balance the rights of the Eurosystem - as system owner and operator - with
the rights of the CSDs which will adopt T2S, and with those of the central banks which
eventually will provide their currencies to T2S. At the same time, the needs of securities
market users will have to be respected.
Let me finally state that Banca d'Italia, as one of the providers of T2S, is firmly committed to
the success of this project and to fulfil the expectations of the Eurosystem and of the
European market community.