(2) How to ensure the necessary coherence of the efforts undertaken by stakeholders of different importance, submitted to different types of regulations, across the different financial centres that compose the financial system of the euro? 2. What roles for the Eurosystem  The Eurosystem has been quite active in the field of payment systems and is likely to develop further its involvement under its three roles of: (1) service provider, (2) facilitator of market and regulatory evolution, and (3) overseer. 2.1. Providing payment services  As a service provider, the Eurosystem has put priority on enhancing the efficiency and safety of its TARGET system, with the launch of the TARGET2 project. TARGET2 will provide harmonised services and prices, efficient liquidity management and settlement mechanisms, while setting a new benchmark in terms of business continuity. The Eurosystems objective is to promote the use of real-time settlement services in central bank money, given their expected social benefits in terms of risk reduction in the payment process. In the field of retail payments, the degree of the Eurosystem’s central banks’ operational involvement varies across countries. Most central banks provide payment services to public institutions. Some central banks also offer processing facilities to commercial banks by participating in private retail payment systems and/or operating an own retail payment system. The completion of the SEPA project calls for a specific effort of those central banks that are significantly involved in retail payment operations.

A number of local payment systems concentrate the clearing and settlement of all retail national transactions. In addition, the execution of cross-border payments go through several dedicated arrangements such as international card schemes, banking “clubs” or the EBA’s STEP 2 system. The SEPA project aims to put an end to such fragmentation by introducing, as from 2008, European payment instruments which are going to replace national ones by end-2010. The vision is that by end2010 all retail payments in euro are carried out as easily, efficiently and safely across Europe as within national borders. For this vision to become a reality, a key enabler is that retail payment infrastructures become interoperable and consolidate. The outcome of theses changes on retail payment systems is uncertain. It may lead to various structures, ranging from a natural monopoly exercised by one infrastructure that would encompass most national and cross-border payment flows, to the competition between several systems. However, whatever the structure, the challenge will be to find the right balance between two objectives: (1) reaping economies of scale and scope and (2) fostering competitive market conditions and behaviours. 1.2. Keeping pace with technological progress  The second issue for payment infrastructures consists in keeping pace with technological progress. Payment systems are made up of IT networks, hardware and software. As a consequence, technological progress is a key driver for enhancing the way payment systems are designed, operated and used. I will highlight a few significant examples of recent technological developments.