Target 2 (payment system)

History

2025: Massive disruption - interbank operations halted, trillions of euros frozen

The payment system of the European Central Bank (ECB) Target 2 suffered a large-scale failure, blocking interbank transactions in the amount of over €3 trillion. Violations in the system were recorded on February 27, 2025, which led to a halt in settlements between the largest financial institutions in the EU.

According to Reuters, the cause of the failure was a "hardware defect" not related to a cyber attack or external interference. The issue affected not only Target 2 "s main settlement system, but also Target 2 Securities (T2S) platform, which provides settlements for financial transactions in 24 central depositories, including Euroclear.

𝓲

Фото: Freepik

The system malfunction began at 07:30 GMT and lasted about seven hours, until 18:00. The European Central Bank has taken emergency measures to restore the system to work, several times extending the deadlines for submitting applications for settlements. The final deadline for settlements was shifted by six hours, to 21:00 GMT.

T2 and T2S work schedules have been extended to ensure that after troubleshooting, payments and securities transactions in line with today's value date will be settled, an ECB spokesman said.

During the period of failure, banks were advised to continue placing payment orders in the queue, waiting for the system to be restored. For critical payments, the ECB left open a backup communication channel.

Hogan Lovells partner and market structure expert Michael Thomas noted the possible serious consequences of this incident: Where there are transaction chains, where each depends on the completion of the other, a gap in the chain could affect the entire range of transactions. The longer the delay, the greater the impact on liquidity in the financial system, where cash cannot be realized because securities transactions cannot be completed.[1]

Notes