The thinking behind the plans was revealed by ECB board member Yves Mersch at the Sibos conference in Singapore. Introducing a session on future of Europe’s financial market infrastructure, he drew an anology of the merger of the internet, mobile phone and digital camera to create the smartphone as a rationale for a process of continuous innovation in Europe's financial markets.

Presenting the Eurosystem's 'Vision for 2020' project Mersch said: "Over the coming years, we will seek to draw on the synergies between Target2 and T2S. One idea is to consolidate some components of the technical infrastructure and maybe even form a single platform."

Mersch says that such a move would enable Target2 to benefit from some of the state-of-the-art features of T2S, such as the implementation of ISO 20022 standards.

Migration to ISO 20022 in Target2 was originally planned for November 2017, but bank discomfort at the upheavals created by the move led to a postponent of the plans in the summer.

Further advancements from ongoing harmonisation could come in the form of a liquidity savings mechanism in Target2 and statistical tools to support banks with their regulatory reporting.

"The enhancements we envisage for Europe’s financial market infrastructure will benefit users from a technical perspective in that they will have access to all available services via a single gateway," said Mersch. "Moreover, these enhancements will provide an opportunity to further increase the resilience of the system."

Another element of the 2020 Vision statement is the creation of a common Eurosystem collateral management system. "With T2S, it is now possible to have a single, centralised, pool of collateral, making it much simpler and faster to move collateral from where it is to where it needs to be," said Mersch.

Banks who have spent the past 15 years adapting their systems and business models to accommodate the introduction of Target2 and T2S may throw up their hands in exasperation at the plans, but Mersch sounded a conciliatory tone.

"I should stress that our vision for market infrastructure integration is not, nor should be, ours alone," he said. "Following the success of our collaboration with the market during the development of T2S, we intend to take the same approach going forwards - to work together with the market to identify what its needs are and to draw on the expertise in both the public and the private sectors. Through collaboration we will define where European market infrastructure should be heading."

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