yves mersch : the possible triangle - frictionless movement of payments, securities and collateral across europe speech by mr yves mersch, member of the executive board of the european central bank, at the 2019 annual general meeting of the international capital markets association's european repo and collateral council, luxembourg, 31 january 2019. * * * introduction this year, we celebrate the 20th anniversary of the euro, the single currency of 19 eu countries and over 340 million europeans. but the euro is not only important for european citizens and businesses ; it also has a global role. in fact, it is the second most used currency in the world. more than 50 countries or territories in the world use or link their currency to the euro. more than 20 % of the international reserves held by central banks outside the euro area are in euro1 – a percentage that exceeds the euro area ’ s share in global production. furthermore, the euro has become a widely accepted currency for international payments. in 2017 about 36 % of international transactions – in value terms – were invoiced or settled in euro. the status of global currency is a double - edged sword. having more weight as an international currency comes with pros and cons. the list of traditional benefits includes higher seigniorage and lower transaction and hedging costs. and – following the experience of recent decades – we can now add the better protection of domestic inflation and reduced dependence on monetary policy decisions of other major central banks. but the euro ’ s role as an international currency also comes with increased responsibilities. international currencies must be backed by large, stable and efficiently functioning economies and financial systems that are attractive to international users and investors. and last but not least, the effect of monetary policy on import prices is reduced. the ecb has always held that the international role of the euro develops as a result of market forces. accordingly, the internationalisation of the euro as such has never been a policy objective. in december 2018, however, the european commission presented a set of action points to strengthen the euro ’ s global role. to this end, the euro should become even more compelling as a means of payment and a trustworthy investment currency. these action points include the completion of economic and monetary union, banking union and capital markets union. moreover, and without prejudice to the ecb ’ s independence, we take note of the commission ’ s support for our initiatives on market infrastructure and payments, which help to increase efficiency and financial market integration

cross - border transactions were up to ten times more expensive. t2s has brought the transaction fee per instruction down to a much lower level. initially, the delivery - versus - payment price for t2s was set at 15 cent per instruction. however, the effects of the financial crisis and delays in the migration of certain t2s markets reduced t2s volume and income in the first few years of its operation. as a result, the t2s pricing structure was adjusted, and fees per instruction were increased from 15 cent to 19. 5 cent, plus a temporary surcharge of 4 cent. this is still substantially lower than the average fees of 73 cent observed before the launch of t2s. t2s has also been a catalyst for harmonising the post - trade market in the eu and beyond. faced initially with a wide variety of different practices across european markets, the sound t2s governance structure fostered collaboration between stakeholders, who soon recognised the added value of harmonisation for their business models. the integration of ancillary processes and legal frameworks to a large extent dismantled several of the barriers that had hitherto hindered efficient cross - border clearing and settlement arrangements in the eu. these barriers were identified as early as 2001. last but not least, in november 2018 the eurosystem delivered target instant payment settlement ( tips ), a truly domestic market infrastructure for pan - european instant payments with settlement in central bank money. tips enables payment service providers to offer fund transfers to their customers in less than ten seconds around the clock, every day of the year. the upcoming technical and functional convergence of target2 and t2s will further optimise liquidity management and generate new cost efficiencies. in particular, the consolidation project, which will run until 2021, will introduce a central liquidity management system that will allow participants to monitor and manage their liquidity for all target services. more specifically, it will provide a central liquidity overview on a single screen with easy access to more detailed information. it will enable centralised management and control over the payment capacity with a clear allocation of liquidity for the different settlement purposes. real - time gross settlement participation will be segregated from interaction with central banks for monetary policy purposes. 2 / 5 bis central bankers'speeches the minimum reserve calculation and automatic marginal lending facility will take into account balances in other eurosystem market infrastructures, such as tips. in summary, the introduction of central liquidity management