Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/167795 
Year of Publication: 
2015
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 3 [Issue:] 4 [Publisher:] MDPI [Place:] Basel [Year:] 2015 [Pages:] 482-509
Publisher: 
MDPI, Basel
Abstract: 
This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis, when some countries registered a decisive inflow of the central bank liquidity and others showed an outflow. The dynamics in the TARGET2 are here explained as being due to a fall in the level of confidence in the capacity of the Economic and Monetary Union to survive, rather than to disparities in the level of competitiveness among countries of the Eurozone. This crisis of confidence has to be considered as the consequence of the implicit refusal of the European institutions to create a mechanism working as lender of last resort for the euro area member States; indeed, only when the ECB took this responsibility by launching the Outright Monetary Transactions clear signs of improvement were observed in the sovereign debt crisis.
Subjects: 
payment system
monetary policy
fiscal policy
financial crisis
JEL: 
E42
E52
E58
E62
F32
F34
F36
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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