TARGET (im)balances at record level: Should we worry?
LAccording to the ECB, the recent rise in TARGET 2 balances could be seen as the result of the decentralised implementation of the extended asset purchase programme (APP). The programme entails cross-border payments by the purchasing NCBs, with around 50% of involved counterparties resident outside the euro area, including the UK. These counterparties access the TARGET system via a limited number of financial centres, particularly Germany and, to a lesser extent, the Netherlands. According to the ECB, the increase in TARGET balances stemming from the concentration of cross border flows due to APP transactions would reflect technical features of the euro-area financial structure rather than evidence of financial stress. However, these imbalances recently may be well indicative of a persistent fragmentation within the euro area’s financial markets as well as uneven liquidity allocation; the risks of which may be understated. Against this background, the paper discusses what the underlying factors behind the recent rise of TARGET2 (im)balances are, and the risks associated to rising Target (im)balances for the ECB’s monetary policy.
Indgående analyse
Ekstern forfatter
Paul DE GRAUWE, Yuemei JI, Corrado MACCHIARELLI
Om dette dokument
Type af publikation
Nøgleord
- betalinger inden for EU
- betalingssystem
- Den Europæiske Centralbank
- DEN EUROPÆISKE UNION
- Det Europæiske system af Centralbanker
- EU-institutioner og EU-forvaltning
- EU-lovgivning
- EU-ret
- euroområdet
- FINANSER
- fri kapitalbevægelighed
- kredit- og finansinstitutter
- kreditinstitut
- monetær politik
- monetære forhold
- valutaforhold