Oferta Técnica de Equipamiento, Puesta en marcha y Mantenimiento

EPC EPC BANKS + CSM CHOICE COMPETITIVE

Core and Value Added Services COOPERATIVE Scheme Management Business Rules & Practices Standards BANKS CHOICE CLIENT CHOICE PROCESSORS NETWORKS PARTLY COMPETITIVE PARTLY COOPERATIVE COOPERATIVE COMPETITIVE SEPA-Scheme Compliant ACH Bilateral/ Multilateral/ Decentralised Intra- group

 Multilateral clearing and settle ment mechanism (with out clearing houses)

 Bilateral clearin g and settle ment m echanism (in cluding bilateral account management: in other words, correspondent banking relationships)

 Intra-group clearing and settlement

 Clearing and settlement within the same bank

As a pan-European clearing house may be capable of c onnecting all payment service providers that engage in SEPA payments, this solution is clearly preferred by the EPC. The EPC also does no t ru le ou t th e possibility of ach ieving SEPA geographical co verage by linking cleari ng and settlemen t syste ms. Th e im plementation of the SEPA p ayment schemes and the displacement of old payment instruments are greater priorities in international and domestic payment traffic than the consolidation of clearing houses. The years to c ome, therefore, will enable the free evolution of competition among the clearing systems, clearing houses and data processors. As a resu lt, the survival or growth of these institutions is to be expected.

However, such service providers do not operate in a regular market. Clearing houses – and most processors – are owned by European banks. These banks are also users of services in the same infrastructures.

In the short term, it is p robably the pan-European clearing house(s) and some networks of other clearing houses and banks that will b e in charge of clearing SEPA in struments in the SEPA area. In order for this to be achieved in t he shortest possible time, the EPC has called on t he actors i nvolved in clearing to find th e ap propriate balance on t he issu e of cooperation and competition.

Today, t he first priorities of th e EPC are the im plementation of th e SEPA payment schemes and migration to the new schemes. The banks forming the EPC are aware t hat the consolidation of clearing houses is inevitable in the longer term and that the Euro Zone will make do with fewer clearing systems. However, for the time b eing (until migration to the SEPA sc hemes i s c ompleted), t hey do not u rge a ny re duction i n t he number of cl earing houses.

That will ch ange in later stages. Star ting i n 2013–2014, with SEPA m igration completed for the most part, the clearing market will also be transformed. It remains to be seen what the European clearing map will look like in the future.

11. THE FUTURE OF EUROPEAN CLEARING HOUSES

The E uropean clearing m ap has just entere d the t ransitory p eriod. An attempt at an y forecast of fut ure development may be made by exploring the changes that have already occurred, the processes known, and the interests of the banks determining these processes.

The STEP2 syste m o f EB A Clear ing S.A. is known to be th e only p an-European clearing house today. It is the only system capable of connecting th e banks of all SEPA countries. However, a major flaw of the STEP2 system is that the traffic it drives has so far remained rel atively m odest. L uxembourg i s t he only SE PA M ember St ate t o have channelled its clearin g i nto th e syste m. Alth ough it h as attracted th e m ajority o f international t raffic b etween larg e banks, t he system w ould only achi eve a r eal breakthrough if entire banking communities were migrated.

The plans of the other clearing systems are largely influenced by the shareholders of the organizations operating them and the interests specific to participating institutions.

In c ountries where ce ntral banks a re res ponsible for t he technical operation of t he clearing system, but the system itself is managed by the banks participating in clearing (e.g. Belgium); the banking community is in clined to migrate its traffic, at th e first op portunity (in 2010 at t he earl iest), t o a pa n-European platform or the cl earing s ystem of a nother country. For such communities, abandoning their own platforms and joining a partner with a great potential for economies of scale may be the way to reduce operational costs and improve their competitiveness.

By contrast, where the central bank not only operates the clearing system but also runs it as a clearing house , as in the case of Deutsche Bundesbank, it is to be expected that the central bank will remain a serv ice provider. The primary motivation of central banks is to ensure that a large num ber of sm all local banks can be come reachabl e Europe-wi de at competitive rates, without becoming dependent on large local banks. From the perspective of central banks, the increasing prevalence of large banks as intermediaries is not desirable in terms of either competition or fi nancial stability. It is t o be noted that in Germany, the role of the central bank’s system is only auxiliary to bilateral relationships and the clearing operations of smaller co mmunities. It is also limited to clearing the segment of th e traffic which the other solutions are not capable of handling effectively.

In a large number of European countries, central banks have traditionally kept clear of automated clearing houses that process orders of small value. Where such clearing houses were formed as club-like organizations of banks, and are owned by banks, changes have taken place in accordance with the economic philoso phy prevailing i n recent years. The not-for-profit character of clearing houses and their focus on clearing activities have been eroded. A lthough th ey con tinue to b e owned m ostly b y banks, a growing nu mber of shareholders are no t b anks. Activ ities are b ecoming d iversified an d now in clude new elements su ch as e-in voicing and Electron ic Bill Presen tment an d Pay ment (EBPP), electronic si gnature aut hentication, a variety of dat a w arehouse se rvices, t he t akeover of subordinated banking activ ities, serv ices to facilitate e-trad e, car d pro cessing, credit reference services, etc. T he sepa ration of cu stomer and s hareholder roles , as well as diversification, motivate organizations to grow. It is not surprising that such clearing houses are i mportant drivers o f c hange. T heir p rimary ob jective m ay be t o merge with other clearing houses or to take full control of the traffic in certain countries.

Despite strong com petition among clearing houses, organizations of this type have no other choice but to cooperate closely with other clearing systems and clearing houses. The EACHA7 _{has dev eloped protocols for in teroperability. Th e b ilateral relatio nships of the} European clearing houses participating in the project are based on a common standard and are sim ilar to th e TARGET1 system in p articular. T his t ype of re lationship m ay, i n principle, e volve i nto an ef ficient m odel, si nce a net work o f s uch rel ationships does not require the same k ind of cen tralization, in operational terms, as T ARGET2. At the same time, the di rect connection of clearing houses cannot be a long-term solution for se veral reasons. On the one hand, these clearing houses do not as yet operate in every European        

country, which prevents them from covering the SEPA area completely. On the other hand, the b anking co mmunities o f u ncovered cou ntries m ay e ither choo se t he pan-Eu ropean clearing house, or settle their traffic bilaterally.

Clearing houses built on a n ational basis have certain major advantages over the pan- European clearing house. They do not form an elite cl ub,8 _{and they have inherited a wide} customer base and a significant volume of t raffic. If they adapt successfully to the SEPA environment, they have a potential for growth using central banks’ clearing systems (e.g. the RPS system o f D eutsche Bund esbank). In t oday’s European m arket, t here are three clearing h ouses which are no t p an-European yet have st rong in ternational ambitions: th e French STET, the German-Dutch Equens and the British VocaLink.

As the clearing houses do not necessarily perform the tasks of data transmission and processing, two processors also need to be part of the picture. These are SIA, a processing and data transmission company established by Italian banks (it operates the pan-European STEP2 pl atform), and SWIFT, a gl obal servi ce provider ow ned by ban ks. SWIFT is traditionally e ngaged i n data t ransmission, a nd i s al so t he operator o f t he Eu ro1/STEP1 platform. SWIFT, not being a clearing house itself, can provide a se rvice which competes with clearing houses primarily in the field of bilateral clearing.

Based on the facts mentioned above, a SEPA-based European clearing map of the future can be outlined as follows:

Source: Kovács Levente Figure 3.

Topology of clearing in Europe

This map does not indicate the connecting lines along which the vast majority of traffic will be handled.

The deca de precedi ng 2007 was characterised by t rust in t he regulations aim ed at ensuring financial stability and in the system of supervisory institutions. Nothing, therefore, disturbed interbank lending. Individual payment service providers were making efforts to optimize t heir cl earing c osts. Lar ge banks secu red c harges i n st rong devi ation f rom infrastructures, which made access to the system expensive for institutions handling smaller volumes of t raffic. I n t urn, these l arge banks attracted smaller b anks, as in termediation allowed them to achieve lower rates for clearing their own payments than they could have done by obtaining direct membership of a clearing house. A model was emerging in which large banks m anaged acc ounts f or smaller o nes, and traffic between large banks was cleared through the PE-ACH.

Today’s financial crisis will set a new d irection. In th e future, smaller institutions will probably be mo re vigilant of their exposure to larger banks. For that reason, it is expect ed that a wi de ran ge of banks will seek opportunities to link directly to a clearing house of their choice. This tendency will reinforce the role of locally connected clearing houses, with short-term changes expected in countries where the clearing architecture is not considered safe enough by participants.

A c omparison of t he European m odel with the system of clearing houses in the US clearly shows that the European market cannot accommodate a dozen local clearing houses for long. At the same time, a greater number of institutions could survive, as the benefits of competition counterbalance the higher costs of passiveness resulting from monopolization. Nevertheless, the European system could be more versatile, flexible and in novative in the future t han i ts g overnment-dominated Am erican c ounterpart. H owever, E urope s hould make sure that competition, which facilitates innovation, is retained in the future as well. REFERENCES

[1] T. Padoa- Schioppa: Clearing and settlement of securities – a European perspective – Symposium o f th e Deutsche Bu ndesbank “Pay ments an d Securities Settle ment Systems in Germ any agai nst the Backgr ound of Eu ropean and I nternational Developments”, Frankfurt 2001.

[2] R. Boer, T. Booijink, J. Schokkenkamp: Trends and Development in Online Payments & Background and T heory Online Payments 2009 – European m arket overview, www.innopay.com, Innopay 2009.

[3] L. Bartha: Payment systems in the European Union (in Hungarian), Prime Minister’s Office and Ministry of Foreign Affairs, 2003

[4] Additional relevant m aterial (u npublished and used with t he pe rmission of t heir respective authors): Papers by the EPC SPS Working Group, Papers by István Prágay (GIRO Ltd. Budapest) on clearing

COACHING RELATED FINDINGS OF A COMPARATIVE