The failure of the securities settlement system has caused a ‘state of siege’ among the most important parts of the stock market infrastructure in Europe. Moreover, if the system does not recover from this IT failure by the evening, there is a real possibility that there will be no stock trading tomorrow on the major markets in the EU, such as Frankfurt, Paris, or Amsterdam.
According to the Croatian National Bank, there are currently technical difficulties in the TARGET systems T2, T2S, and TIPS that prevent the settlement of interbank transactions for credit transfers, direct debits, and cross-border instant credit transfers between payment service users. – The problems affect transaction processing and communication among participants; however, they do not affect the execution of intra-bank transactions.
The Eurosystem, as the administrator, is actively working to resolve the issues and is taking all necessary measures to resume normal operations as soon as possible. A gradual stabilization of the system is expected following the ongoing technical interventions. Once the difficulties are resolved, a delay in the end of the day in the T2 and T2S systems is planned to allow for the processing and settlement of all received transactions – states the announcement.
The biggest problem is that T2S, the settlement system for transactions involving securities, stocks, bonds, and financial derivatives, has failed. According to unofficial information from market participants, there is currently complete chaos in the European stock market as depositories are unsure which of the buy-sell transactions executed on Tuesday have been settled or recorded today. In other words, no one knows for certain which investors hold specific securities and in what quantities.
