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The True Size of the ECB: New Insights from National Central Bank Balance Sheets

Author

Listed:
  • Stephen Wright

    (Birkbeck, University of London)

  • Charmaine Portelli

    (University of Malta)

Abstract

The balance sheet of the European Central Bank (ECB) represents a very small fraction (onetenth) of the reported balance sheet of the Euro Area system as a whole. This paper presents evidence that the effective size of the ECB's balance sheet is massively higher than this, and indeed is significantly higher even than the reported balance sheet of the Eurosystem as a whole. We point to strong evidence that most NCBs (especially those of the larger countries) effectively act on autopilot, as branches of a near-monolithic institution which we term the "Mega-ECB". The lending behaviour of the "Mega-ECB" appears to have been driven primarily by the borrowing needs of the distressed countries of the EU's southern periphery.

Suggested Citation

  • Stephen Wright & Charmaine Portelli, 2018. "The True Size of the ECB: New Insights from National Central Bank Balance Sheets," Birkbeck Working Papers in Economics and Finance 1807, Birkbeck, Department of Economics, Mathematics & Statistics.
    • Handle: RePEc:bbk:bbkefp:1807
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    File URL: https://eprints.bbk.ac.uk/id/eprint/26847
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    References listed on IDEAS

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    More about this item

    Keywords

    central bank balance sheet; capital key; ECB; Eurosystem; national central canks; Target2.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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