The European Central Bank is stepping up the pressure on the banking industry to lower costs and increase the efficiency of retail cross-border payments transfers in time for the introduction of euro notes and coins in 2002.
The ECB says it will consider introducing a retail version of the large value cross-border Target system if banks fail to make progress in closing the efficiency gap between cross-border payment and retail payments.
The ECB says recent initiatives to introduce uniform standards and an interbank infrastructure for processing retail payments have removed the causes of the high prices and low service levels which have been the hallmark of cross-border retail credit transfers.
The central bank says it will monitor banks progress in raising standards throughout the year and publish an assessment report in early 2002.
"This assessment will become a litmus test for retail banking in the euro area," says the ECB. "A failure of banks to deliver efficient cross-border retail payment services by 2002 would...force the Eurosystem seriously to...become more operationally involved."