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Monitoring Ireland’s Payments using TARGET2

Author

Listed:
  • Downey, Claire

    (Central Bank of Ireland)

  • Lyons, Paul

    (Central Bank of Ireland)

  • O'Malley, Terry

    (Central Bank of Ireland)

Abstract

With the aim to develop indicators to better understand the interconnectedness of the Irish banking system and to identify the build-up of potential systemic risks, this article describes TARGET2-IE, Ireland’s component of the Eurosystem’s large value payment system (TARGET2). In doing so, we seek to highlight how close monitoring of payments data can confer a deeper understanding of the components that contribute to the smooth functioning of the Irish economy and a stable financial system. Following a description of TARGET2-IE, we highlight the underlying topology (map) of Ireland’s interbank and customer payment networks. We identify key bank connections arising from payment flows between banks and introduce indicators for systemic risk monitoring. The indicators provide information on the relative importance of banks in the networks, liquidity conditions, key connections and payment inflows and outflows.

Suggested Citation

  • Downey, Claire & Lyons, Paul & O'Malley, Terry, 2017. "Monitoring Ireland’s Payments using TARGET2," Quarterly Bulletin Articles, Central Bank of Ireland, pages 81-95, April.
    • Handle: RePEc:cbi:qtbart:y:2017:m:04:p:81-95
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    References listed on IDEAS

    as
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