As regards payment systems, the TARGET system will also contribute to the rapid emergence of a unified money market throughout the euro area. TARGET will connect the domestic real-time gross settlement (RTGS) systems operated by the national central banks. It will enable participants to make totally safe cross-border settlements in euro, in real time and at a low cost, thereby facilitating interest rate arbitrage. All large-value payments related to BIS Review 112/1997  -6-  monetary policy operations will have to process through TARGET. A common closing time for domestic RTGS and the harmonisation of conditions under which intraday liquidity will be provided by national central banks within the euro area should also help prevent any risk of segmentation of the single money market. 2.1.2. Interest rate volatility The EMI has described in various publications the set of monetary policy instruments that will be made available to the ESCB.7 This set will comprise open market operations, standing facilities and minimum reserves. It should fulfil two basic functions: firstly, to enable the ESCB to control efficiently its operational target; secondly, to signal the ESCB monetary policy stance. It should also be consistent with the requirement laid down in the Maastricht Treaty that the ESCB should act in accordance with the principle of an open market economy with free competition, favouring the efficient allocation of resources.
In the long term, however, the current low level of interest rates is not compatible with price stability. If the economy performs as expected, the National Bank will further pursue the gradual adjustment of its monetary policy that has already been initiated. BIS Review 36/2006  1