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E U R O P E A N M O N E T A R Y I N S T I T U T E

P A Y M E N T S Y S T E M S

IN THE EUROPEAN UNION

A p r i l 1 9 9 6

PAYMENTS

YSTEMS

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PRIL

1996

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Payment systems

in the

European Union

PAYMENT SYSTEMS IN THE EUROPEAN UNION

April 1996

E U R O P E A N M O N E T A R Y I N S T I T U T E

PAYMENT SYSTEMS IN THE EUROPEAN UNION

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European Monetary Institute, 1996Postfach 10 20 31, D-60020 Frankfurt am Main

All rights reserved . With the except ion of rights granted by statutory law, no part of thi s publication may be

reproduced, translated, stored in a retrieval system, or transmitted in any form by any means, electronic,

mechanical, photocopying, recording or otherwise, without the prior written permission of the European Monetary

Institute. Photocopying for educational and non-commercial purposes permitted provided the source is

acknowledged.

ISBN 92-9166-000-0

Printed by Kern and Birner GmbH & Co, D-60486 Frankfurt am Main.

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Page

Foreword

Introduction

Chapters 1. Belgium 1

2. Denmark 47

3. Germany 83

4. Greece 133

5. Spain 171

6. France 2217. Ireland 267

8. Italy 315

9. Luxembourg 363

10. Netherlands 389

11. Austria 433

12. Portugal 477

13. Finland 521

14. Sweden 571

15. United Kingdom 609

16. Cross-border payment and securitiessettlement systems 663

Annexes 1. Methodology for the statistical data 707

2. Comparative tables 717

3. Glossary 739

4. Editorial Group members 759

In accordance with Community practice, countries are listed in the Blue Book using the alphabetical order of

the nat ional l anguages.

Data used in the Blue Book are as of end-1994 unless otherwise indicated.

Convention used in the tables:

- Nil

n.a. Not available or not applicableneg. Negligible

Contents

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Foreword

banking. Indeed, central banks face the tasknot only of controlling the volume of moneyin the economy, but also of ensuring thatmoney circulates smoothly among economicagents. In this context, increasing attention isdevoted to the potential risks associatedwith the functioning of payment systems andcentral banks are committed to contributingto the reduction of such r isks.

The need for a comprehensive description of

payment and securities settlement systems inthe European Union is even greater in viewof the advent of European Monetary Union,which will in particular require a minimumlevel of integration of EU payment systems inorder to serve the needs of the singlemonetary policy. However, the Blue Book isnot an instrument reserved solely for the useof central banks. Other institutions involvedin discussing payment systems issues, or inestablishing or using payment systems

infrastructures, may also benefit from itsextensive information.

This book has been produced in collaborationwith the EU central banks. In this context Ishould like to take this opportunity to thankthe EU centra l banks for their valuablecontributions to the preparation of this sourceof reference.

Frankfurt, 11th April 1996

Alexandre Lamfalussy,President

In September 1992 the Committee ofGovernors of the Central Banks of theMember States of the European EconomicCommunity published a descriptive guide tothe payment systems in the twelve ECMember States which has come to be knownas the Blue Book. This second edition,published by the European Monetary Institute,contains revised texts and data which takeinto account the fundamental changeswitnessed in the intervening period. Those

who wish to compare this version of the BlueBook with its predecessor will realise howquickly EU payment systems are changing inorder to keep up with developments, inparticular:

the entry into force of the Single EuropeanAct on 1st January 1993;

the entry of three additional membersinto the European Union (Austria, Finland

and Sweden) on 1st January 1995;

the decision of the EMI Council in May1995 to create TARGET, a system linkingthe domestic real-t ime gross settlement(RTGS) systems across the EuropeanUnion, with the primary aim of enhancingthe conduct of monetary policy in StageThree of EMU; the development ofTARGET is supported by the EU centralbanks collective decision, taken inNovember 1993, to implement real-timegross settlement systems in all EUcountries.

The importance of payment systems inmodern economies has grown considerablyover the last two decades, partly as a resultof the very rapid growth in the volume andthe value of payments stemming from money,foreign exchange and financial markets.Payment systems are at the heart of central

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Introduction

The intention behind the Blue Book is toprovide a comprehensive description of theprincipal payment and securities settlementsystems operating in the Member States ofthe European Union (EU) on both a domesticand a cross-border basis. The range ofschemes covered is not exhaustive and theselection is not intended to indicate theirrelative importance.

For historical reasons and due to differences

in the legal, regulatory and institutionalenvironment, the variety and structure ofpayment systems differ from country tocountry. However, there are also manysimilarities which, in view of the creation ofmonetary union, are likely to increase.

In order to allow straightforward comparisonof the various payment systems, the followingfifteen country chapters follow a commonlyagreed outline.

Each one consists of four sections: the firstsection provides an overview of theinstitutional aspects which have an impact onpayment systems and describes briefly themajor parties involved. The second sectiondeals with the payment media used by non-banks and recent developments in the areaof retail payments. The third section focuseson the interbank exchange and settlementcircuits, and the fourth section describessecurities settlement systems, including theunderlying institutional and market aspects.

In comparison with the previous edition ofthe Blue Book, the third section of eachcountry chapter has been substantiallyaugmented. This reflects first the growingimportance attached by central banks toreal-time gross settlement (RTGS) systems.In November 1993 the EU central bankspublicly stated that such systems should bepromoted in order to reduce systemic risks

substantially in the processing of large-valuepayments, and made a collective decision to

implement RTGS systems in all EU countries.The development of RTGS systemsaccelerated following the decision toimplement TARGET, which will involve thelinking of the domestic real-time grosssettlement systems being developed by theEU central banks in order to meet theEuropean Central Banks payment systemsneeds for the implementation of the commonmonetary policy. Furthermore, because EUcentral banks consider that their oversight

duties require a good knowledge of thefunctioning features of all funds transfersystems, the third section of each countrychapter also contains a description of retail(i.e. small-value) payment systems which ismore detailed than in the previous edition.

In addition, the fourth section of each countrychapter provides more detailed descriptionsof the domestic and European securitiessettlement systems, reflecting the growing

links which exist between payment andsecurities, such as the development of deliveryversus payment mechanisms and theincreasing use of collateralisation in paymentsystems.

Each country chapter includes a list ofabbreviations and a set of statistical data. Thelatter are presented as time series in order tofacilitate the analysis of recent developments.Where possible, these tables follow thepresentation used in the report published inDecember 1993 by the Bank for InternationalSettlements on Payment Systems in theGroup of Ten Countries (the so-called RedBook). However, some tables have beenmodified and extended in order to reflectthe more harmonised situation in Europeand to serve as a reference for decisionsboth on the further integration of EU paymentsystems and with regard to the singlemonetary policy.

In addition to the country chapters, a finalchapter deals with cross-border payment

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arrangements. These have undergonesubstantial changes in recent years, mainly

driven by the wish both to reduce the risksinherent in large-value payment systems, andto meet the needs of European consumersfor the more efficient execution of cross-border retail payments.

Finally, the annexes contain a methodologyfor the statist ical data, cross-bordercomparative tables, a glossary and a list ofmembers of the Editorial Group responsiblefor the co-ordination of this edition.

The structure and content of this secondedition of the Blue Book are influenced bythe analysis of a number of payment issuescarried out in recent years by the EU central

banks. The results of this analysis were madeavailable to a wider public in various reports

published by the former Committee ofGovernors of the Central Banks of theMember States of the European EconomicCommunity and by the EMI: Issues ofcommon concern to EU central banks in thefield o