Finance
ECB's multi-trillion payments breakdown sends shudders through Europe
Published by Global Banking & Finance Review®
Posted on February 28, 2025
2 min readLast updated: January 25, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 28, 2025
2 min readLast updated: January 25, 2026
The ECB's payment system breakdown disrupted trillions in transactions, causing delays and raising concerns about eurozone stability.
By Tom Sims, Francesco Canepa and John O'Donnell
FRANKFURT (Reuters) -Banks struggled to process payments on Friday after an unprecedented day-long breakdown in the European Central Bank's machine underpinning trillions of euros of money movements.
The ECB said late on Thursday it had fixed the roughly seven-hour outage in its payment system, which had left transactions likely worth trillions of euros from firms, consumers and investors up in the air.
The breakdown, which has dealt a blow to the international standing of the central bank behind one of the globe's most important currencies, continued to reverberate on Friday.
The malfunction of the so-called Target 2 system (T2), used to settle more than 3 trillion euros ($3.12 trillion) of daily payments and financial trades, meant transactions between banks could not go through.
The breakdown meant some ordinary bank payments, such as wages, pensions and social welfare transfers, have been delayed and could take several hours longer than usual to arrive, said a spokesperson for Germany's central bank, the Bundesbank.
Deutsche Boerse's Clearstream, which processes the trading of securities such as company stock, and handles around 500,000 transactions daily, also reported delays.
The company said that there was still a residual impact on Friday, although it had largely restored services.
The incident lasted until early on Friday morning, delaying money sent in the night for about six hours, said a person familiar with the breakdown, and upsetting the system for what is likely to be a number of days.
While it remained unclear whether the mishap would be felt by regular bank customers, it has raised a question mark over the transactions between lenders that underpin the very functioning of the euro zone's economy.
In its statement late on Thursday, the ECB said T2 was again functioning normally but that all the deadlines to settle the day's payment flows had been postponed by several hours.
It said the outage was caused by a "hardware defect" and had not involved "malicious (or) foul play".
Banks, which depend on the system to settle their accounts with one another, had been instructed to keep placing their payments in the queue until the issue was finally fixed.
($1 = 0.9614 euros)
(Additional reporting by Frank Siebelt in Frankfurt; Editing by Matthias Williams, Thomas Seythal, Gareth Jones, Philippa Fletcher)
The ECB stated that the outage was caused by a 'hardware defect' and confirmed that there was no malicious intent involved.
The breakdown lasted approximately seven hours, causing significant delays in transactions that typically involve trillions of euros.
The malfunction of the Target 2 system resulted in delays for ordinary bank payments, including wages and social welfare transfers, which could take several hours longer than usual to process.
Yes, the ECB announced that the Target 2 system was functioning normally again, but all deadlines for settling the day's payment flows had been postponed by several hours.
The Target 2 system is crucial for settling over 3 trillion euros of daily payments and financial trades, making its reliability essential for the functioning of the eurozone's banking system.
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