The TARGET system has been created with a view to improve the efficiency of interbank payment and clearance systems within the bounds of the European Union. The new system was designed to promote integration processes in the euro money market, thus facilitating the conduct of monetary policy by the European System of Central Banks. TARGET, which integrates 15 national RTGS payment systems and the payment mechanism of the European Central Bank, is not merely another payment system. It provides services throughout the area of the European Union, exceeding the frontiers between the national systems. TARGET can be accessed by more than 34 thousand banks and other credit institutions from all over EU. It was primarily created to help handle large payments, but, since no minimum amount of transaction was specified, smaller financial institutions can benefit from it, thus providing better service for their clients.

The first few months of TARGET's operation show that it is treated as a standard system used to settle large international payments. It is rather seen as a convenient facility which improves the efficiency and reduces the risk of banking - and not a compulsory instrument imposed by the EBC. TARGET has proved at least as efficient in effecting international payments as the national RTGS systems that preceded it.

At the threshold of the third stage of the monetary union, two new systems for settling international transactions were made available to the financial sector - TARGET and Euro 1. This fact has radically changed the usual way European payments are settled - previously, most of the settlements took place over internal banking networks or through correspondent bank arrangements. Since they were put in place, both systems have been in fierce competition with each other - as well as with the earlier systems such as EAF, PNS or SEPI. In its 19th month of operation, TARGET settles a daily average of 190 thousand transactions totalling nearly one trillion euros; an impressive progress on the 1998 figure amounting to 650 billion euros per day, and comparable to the American Fedwire performance. TARGET's daily turnover is almost twice the amount of payments handled by the other systems, and the average amount of the transaction is almost triple.

This substantial popularity of TARGET in settling not only international, but also domestic payments shows that the system has come up to the expectations. It obviously satisfies the demands of the financial sector, and has sped up capital flows in the European Union while improving their security. All these changes are conducive to creating an integrated euro money market and create conditions for a uniform monetary policy in the eurosystem.