CESifo Forum Special Issue April 2013: Target Balances and the Crisis in the Euro Area
This paper offers a meticulous description and analysis of the development of the Target balances, with a rich set of new data and detailed information that specialists will treasure and the general public will find illuminating. The last part of the paper, in which the author discusses measures to prevent Target balances from ballooning in the future and includes a comparison of settlement possibilities, is particularly thoughtprovoking and useful. In the US system, balance-of-payment imbalances between commercial banks and, much later, district Feds, were settled for two hundred years using gold and gold certificates; and the US system only recently adopted settlement with marketable securities. In Europe no settlement procedure for Target balances has been introduced to-date. Target balances are merely carried forward on the balance sheets of national central banks from year to year, with interest added to the debt and liability positions that have accumulated between the national central banks. This could imply risks that limit the policy choices of member countries. After all, Moody’s decided to consider downgrading the Netherlands and Germany because of their huge outstanding Target claims. It is high time for the Eurosystem partners to discuss the settlement issue more seriously.
Volume (Year): (2013)
Issue (Month): (05)
|Contact details of provider:|| Postal: |
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Karl Whelan, 2012.
"TARGET2 and Central Bank Balance Sheets,"
201229, School of Economics, University College Dublin.
- Martin Handig & Robert Holzfeind & Clemens Jobst, 2012. "Understanding TARGET 2: The Eurosystem’s Euro Payment System from an Economic and Balance Sheet Perspective," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 81–91.
- Raphael A. Auer, 2014.
"What drives TARGET2 balances? Evidence from a panel analysis,"
CEPR;CES;MSH, vol. 29(77), pages 139-197, 01.
- Raphael Anton Auer, 2012. "What Drives Target2 Balances? Evidence From a Panel Analysis," Working Papers 2012-15, Swiss National Bank.
- Raphael A. Auer, 2013. "What Drives Target2 Balances? Evidence from a Panel Analysis," CESifo Working Paper Series 4216, CESifo Group Munich.
- Raphael A. Auer, 2013. "What Drives Target2 Balances? Evidence From a Panel Analysis," Working Papers 13.03, Swiss National Bank, Study Center Gerzensee.
- Silvia Merler & Jean Pisani-Ferry, 2012.
"Sudden stops in the euro area,"
- Bindseil, Ulrich & Winkler, Adalbert, 2012. "Dual liquidity crises under alternative monetary frameworks: a financial accounts perspective," Working Paper Series 1478, European Central Bank.
- Hans-Werner Sinn & Timo Wollmershäuser, 2011.
"Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility,"
CESifo Working Paper Series
3500, CESifo Group Munich.
- Hans-Werner Sinn & Timo Wollmershäuser, 2012. "Target loans, current account balances and capital flows: the ECB’s rescue facility," International Tax and Public Finance, Springer, vol. 19(4), pages 468-508, August.
- Sinn, Hans-Werner & Wollmershäuser, Timo, 2012. "Target loans, current account balances and capital flows: The ECB’s rescue facility," Munich Reprints in Economics 19556, University of Munich, Department of Economics.
- Hans-Werner Sinn & Timo Wollmershaeuser, 2011. "Target Loans, Current Account Balances and Capital Flows: The ECB's Rescue Facility," NBER Working Papers 17626, National Bureau of Economic Research, Inc.
- Philippine Cour-Thimann & Bernhard Winkler, 2012.
"The ECB’s non-standard monetary policy measures: the role of institutional factors and financial structure,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 28(4), pages 765-803, WINTER.
- Cour-Thimann, Philippine & Winkler, Bernhard, 2013. "The ECB’s non-standard monetary policy measures: the role of institutional factors and financial structure," Working Paper Series 1528, European Central Bank.
- Ulrich Bindseil & Philippine Cour-Thimann & Philipp König, 2012. "Target2 and Cross-border Interbank Payments during the Financial Crisis," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 13(SPECIALIS), pages 83-92, 02.
- Buiter, Willem H. & Rahbari, Ebrahim, 2012. "Target2 Redux: The simple accountancy and slightly more complex economics of Bundesbank loss exposure through the Eurosystem," CEPR Discussion Papers 9211, C.E.P.R. Discussion Papers.
- Ulrich Bindseil & Philippine Cour- Thiman & König Philipp, 2011. "Weitere Anmerkungen zur Debatte um Target2 während der Finanzkrise," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 64(16), pages 79-86, 09.
When requesting a correction, please mention this item's handle: RePEc:ces:ifofor:v::y:2013:i::p:05-50. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.