Only 15% see cost savings as the main benefit of T2S

Harmonisation is seen as the greatest benefit from the Target2-Securities project rather than cost savings, according to a survey from BNP Paribas.

The results come before the third wave of implementation is set to take place on 12 September.

Of the participants involved 39% cited harmonisation and the efficiency that come with it as the project’s main benefits.

,A quarter of participants cited collateral and liquidity as benefits, with 21% new functionalities and only 15% believing cost savings will be the key benefit.

“T2S is an ambitious project, which has been more than 10 years in the making,” said James Woods, regional manager for continental Europe, BNP Paribas.

“While cost savings were initially the main anticipated benefit of T2S, market participants now say the main benefit will be the harmonisation the platform will bring.”

Other results from BNP Paribas study revealed that 88% of respondents feel that the project will transform post-trade in Europe once it is fully implemented.

Initially proposed in 2006 by the European Central Bank (ECB), the T2S initiative was designed to create a harmonised European settlement platform with settlement costs proposed at a maximum of 15 cents per settlement.

Industry leaders have since expressed the belief that the project has moved away from the benefits of a harmonised settlement platform that the ECB proposed.

Speaking to Global Custodian earlier this year, EuroCCP CEO and GC Legend Diana Chan suggested that the project would primarily benefit collateral managers and that the market had moved away from those looking to earn money through reduced settlement costs.