Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277441 
Authors: 
Year of Publication: 
2019
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 16 [Issue:] 2 [Year:] 2019 [Pages:] 161-168
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
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.
Subjects: 
TARGET
TARGET2
payment system
quantitative easing
asset purchase program
interbank market
JEL: 
E42
E44
E52
E58
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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