Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/175738
Authors: 
Eisenschmidt, Jens
Kedan, Danielle
Schmitz, Martin
Adalid, Ramón
Papsdorf, Patrick
Year of Publication: 
2017
Series/Report no.: 
ECB Occasional Paper 196
Abstract: 
TARGET balances have risen during the period of the Eurosystem's asset purchase programme (APP). The APP gives rise to substantial cross-border flows of reserves at the time of asset purchases and beyond, reflecting the interaction of decentralised monetary policy implementation and the integrated euro area financial structure. This financial structure, in which only a handful of locations act as gateways between the euro area and the rest of the world, leads to rising TARGET balances at the time of APP purchases and the persistence of TARGET balances in the context of subsequent portfolio rebalancing. TARGET balances per se are not necessarily an indicator of stress in bank funding markets, financial market fragmentation or unsustainable balance of payments developments.
Subjects: 
TARGET2
financial structure
asset purchase programme
excess liquidity
balance of payments
JEL: 
E58
G02
F32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2858-8
Document Type: 
Research Report
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