As Sweden does not participate fully in economic and monetary union, EMU, there is currently both a central settlement system for payments in Swedish kronor, K-RIX, and one for payments in euro, E-RIX.
The Swedish banks are members of the Riksbank's E-RIX system. All of the EU countries have their own national systems for transfers in euro. These systems, including E-RIX, are linked together in a European network for cross-border payments in euro, called TARGET (Trans-European Automated Real-time Gross settlement Express Transfer system).
The Swedish banks can make immediate transfers in euro to a large number of European banks through E-RIX and then TARGET. The payments are immediate in the sense that they are transferred directly, in real time. It is only the central banks in the EU and the European Central Bank (ECB) that participate directly in the TARGET system.
TARGET was originally created as a means for implementing the single monetary policy in the EMU countries, and the system must be used for payments linked to this policy. However, the system can also be used for commercial payments, and as Sweden does not participate fully in EMU, E-RIX is only used for such payments.
Swedish companies and banks already have considerable interest in being able to make rapid, secure transactions in euro with other European banks and companies. Although Sweden has retained the Swedish krona as its currency, approximately 400 payments a day are made in euro, both to and from Sweden, to a total value of around EUR 6-9 million.
When a euro payment is sent from a Swedish bank, the bank writes a payment message that is sent via the Riksbank to the recipient country's central bank, which in turn forwards the message to the recipient bank. The Riksbank debits the sending bank’s euro account with the Riksbank and the recipient bank's account is credited by its central bank.
In November 2002 the ECB Council decided that a second generation of TARGET, TARGET2, would replace the existing system from the year 2007. During discussions with the Riksbank the participants in E-RIX have shown a limited interest in participation in TARGET2 via the Riksbank. Given this and the accordingly high costs expected per transaction from a connection to TARGET2, the Riksbank decided on 4 February 2005 that the Bank would not connect to TARGET2 in 2007.
The Riksbank has decided, after discussion with the participants in the E-RIX system, that the Riksbank will withdraw its participation in the current TARGET system as of 31 December 2006.
For further information on TARGET, see the link to the European Central Bank (ECB) website below.
For further information on settlement in Swedish kronor, see the link to "RIX" in the menu on the left.