The rise of national central banks' TARGET balances in the euro area: a comment

Artikel

With the implementation of the Eurosystem's asset purchase programme (APP), national central banks' TARGET balances have risen. For the European Central Bank, this reflects cross-border payments and portfolio rebalancing in the context of the APP. Minenna et al. (2018) disagree and claim that the causes of rising TARGET balances (2015–2017) have been the persistent current-account surplus of Germany and 'capital flight.' This comment explains that rising TARGET balances occur under specific monetary policy configurations and that the context of the APP was critical to account for rising TARGET balances. It then questions the decomposition approach employed by the authors by arguing that it shows accounting correspondences, not causality, and concludes that there is no established two-way association between TARGET balances and actual vulnerabilities of the euro area.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: European Journal of Economics and Economic Policies: Intervention (EJEEP) ; ISSN: 2052-7772 ; Volume: 16 ; Year: 2019 ; Issue: 2 ; Pages: 161-168

Classification and Topics

• Classification: Wirtschaft ; Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems ; Financial Markets and the Macroeconomy ; Monetary Policy ; Central Banks and Their Policies
• Subject: TARGET ; TARGET2 ; payment system ; quantitative easing ; asset purchase program ; interbank market

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Terzi, Andrea
• Event: Veröffentlichung
• (who): Edward Elgar Publishing
• (where): Cheltenham
• (when): 2019

Further information

• DOI: doi:10.4337/ejeep.2019.0049
• Handle: http://hdl.handle.net/10419/277441
• Last update: 10.03.2025, 11:41 AM CET