TARGET Services

Let’s start with the umbrella term: TARGET, which stands for ‘Trans-European Automated Real-Time Gross Settlement Express Transfer’. This comprises four services, one of which is Target2 (T2). Banks in the EU use this system to transfer funds between themselves.

More than a thousand EU financial institutions use T2 to process euro transactions, whether for themselves or for their customers. On average, 420,000 transactions are processed every day, with a total value of €1.8 billion.

Central banks such as DNB are also involved in the T2 system in a supporting role. When financial institutions such as commercial banks transfer money to one another, the transaction always goes through the central banks in their home countries.

They are involved in opening accounts and monitoring all transactions. Although the sums and volumes involved are substantial, transactions are settled quickly: 99.9% of all transfers are completed in under five minutes.

Intra-European securities trading: T2S

There is a separate service for trading securities such as shares and bonds: Target2-Securities (T2S) which operates under the motto ‘settling without borders’. T2S operates across almost the entire euro area and in four non-euro countries: Denmark, Hungary, Romania and Switzerland.

This platform is maintained and managed by DNB and the other Eurosystem central banks in collaboration with the central securities depositories (CSDs).

T2S is used to process domestic and cross-border delivery-versus-payment securities transactions in central bank money. The platform is used extensively: more than 790,000 transactions are processed every day. Retail banks, the EU central banks and the CSDs all use the T2S platform. T2S perfectly ties in with the Eurosystem's ambition to create an integrated European capital market.

Instant payments: TIPS

Then there is TARGET Instant Payment Settlement (TIPS), a service that enables banks to make payments on behalf of their customers within seconds, 24 hours a day, 7 days a week. This allows businesses and individuals to transfer money in a matter of seconds, regardless of their bank’s opening hours.

TIPS was launched in Europe in November 2018 to enable instant payments in central bank money. Almost all transactions are processed definitively and irrevocably within five seconds. The service was initially available for payments in euros. The Swedish krona was added in February 2024, followed by the Danish krone in April 2025. The Central Bank of Norway is preparing to join TIPS, and Iceland has also expressed an interest in joining.

Collateral management: ECMS

There is a single, standardised system for collateral management, known as the Eurosystem Collateral Management System (ECMS). All local collateral management systems operated by the Eurosystem national central banks have been replaced by the ECMS.

Like the other national central banks that together form the Eurosystem, DNB provides monetary and intraday credit. We offer specific services subject to adequate collateral. We also use the ECMS to manage the collateral pledged to us by counterparties for this purpose. We call this collateral management.

The ECMS tracks the individual collateral and credit positions of the counterparties of the national central banks across the Eurosystem. It calculates the credit line available to each counterparty and sends this information to CLM, the T2 central liquidity management tool.

The collateral is placed in what is known as a ‘monetary collateral pool’. DNB is responsible for transaction processing and corporate actions on behalf of Dutch financial institutions. The credit amount we provide to a counterparty will depend on the value of the assets it has pledged to us as collateral.

Eurosystem central banks have a number of measures at their disposal to hedge against credit risk, such as valuation haircuts. After deducting this amount, a credit facility remains. This is the maximum credit available to a counterparty to cover monetary transactions and payments in the T2 system.

We also manage the collateral for DNB-specific services and purposes, such as:

• collateral management for margin and clearing funds of central counterparties (CCPs). We block part of the collateral pledged by these parties to serve as a buffer in the event of losses in securities and options deals settlement.
• banknote consignment
• retail payments clearance (through EBA STEP2)

Counterparties wishing to use these specific services must provide collateral in what is known as the Second Collateral Pool.