Euro zone banks left flying solo by new glitch in ECB payment system

FRANKFURT (Reuters) – Several euro zone commercial and central banks were left flying solo by a new glitch in the European Central Bank’s payment system late on Monday as they lost access to their online account in the crucial hours before the close of business.

FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium May 5, 2021. REUTERS/Yves Herman

The Target system, which connects banks and central banks around the euro zone and handles payments worth nearly 2 trillion euros ($2.34 trillion) per day, suffered a string of crashes last year, forcing the ECB to launch an independent review and an overhaul.

In Monday’s incident, “a substantial number of participants” such as banks, central banks and market-infrastructure firms, lost access to the platform that allows them to monitor their transactions and account balance with Target, a spokesperson told Reuters on Tuesday.

This meant they had to rely on their own book-keeping to know how much money they had left at the central bank and see incoming and outgoing payments.

“It’s technically not possible to say how many users were affected. It’s probably a substantial number of participants,” the spokesperson said.

“Participants usually do not rely only on Target to monitor their Target account balance and have their own internal accounting tools,” he added.

The incident affecting Target’s Information and Control Module (ICM) started at around 1615 CEST (14:15 GMT) on Monday and was resolved at 2030 CEST, or two and a half hours after Target’s closing time.

Payments could still be settled.

“Some TARGET2 participants are facing an issue preventing the access to TARGET2 ICM,” the ECB said in a notice to participants late on Monday.

“The settlement of payments and ancillary systems is not affected by the issue.”

Target is run by the ECB with the help of the central banks of Germany, France, Italy and Spain. It connects banks to their national central banks, and central banks with each other.

Consultancy firm Deloitte recently completed an independent review after the system ran into technical problems five times last year, in one instance leaving payments grounded for 11 hours.

It found six major issues in how the ECB runs Target, particularly in how changes are made and crises handled.

($1 = 0.8531 euros)

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