During the Eurozone crisis, an analogy was made between the events in Europe between 2007 and 2012 and the collapse of the Bretton Woods System between 1968 and 1971. There has been a build-up of TARGET liabilities since 2007 by some central banks (notably Greece, Ireland, Portugal, and Spain, or the ‘GIPS’), and of TARGET assets by Germany and others.
TARGET balances, Bretton Woods, and the Great Depression
Michael Bordo, 21 March 2014
TARGET2 as a scapegoat for German errors
Paul De Grauwe, Yuemei Ji, 2 November 2012
The accumulation of TARGET2 balances (claims and liabilities) has two possible sources, current account imbalances and capital flows (Buiter et al. 2011). Thus, Germany’s accumulated TARGET2 claims of approximately €800 billion must be the result of a combination of current account surpluses and capital inflows. This is a matter of definition.
TARGET losses in case of a euro breakup
Hans-Werner Sinn, 22 October 2012
When exchange rate adjustments are impossible, imbalances of cross-border payment flows must be accommodated officially. This baseline fact about monetary union has sparked extensive discussion on what the resulting asset positions mean (Sinn 2011a,b, Tornell and Westermann 2012, Whelan 2012).
German savers should applaud the growing TARGET balances
Sebastian Dullien, Mark Schieritz, 7 May 2012
The European debt crisis has led to increasing imbalances between Eurozone central banks, which then show up in the TARGET system (also known as the TARGET2 system).
Eurosystem TARGET balance deviations call for cautious changing of the EU banking landscape
Ossi Leppänen, 18 April 2012
In the monetary policy analysis only the consolidated balance sheet of the Eurosystem is relevant. In a decentralised central banking system individual national central banks’ balance sheets are relevant when assessing banks’ short-term financing needs vis-à-vis each of the national central banks.
TARGET imbalances: Financing the capital-account reversal in Europe
Ashoka Mody, Fabian Bornhorst, 7 March 2012
There is a fierce ongoing debate over the so-called TARGET claims in the Eurozone. TARGET balances are the mechanism through which national central banks within the Eurosystem lend to each other. TARGET positions are intended to smooth over temporary liquidity needs of the member countries and the system is typically close to balanced.
Eurozone Crisis, Act Two: Has the Bundesbank reached its limit?
Aaron Tornell, Frank Westermann, 6 December 2011
Act Two in the unfolding Eurozone drama begins this week as leaders at the European summit announce emergency measures to prevent further market turmoil. Why the sudden urgency? Because the German Bundesbank is about to exhaust its capacity to lend more funds to strapped governments.
A balance sheet view on TARGET – and why restrictions on TARGET would have hit Germany first
Clemens Jobst, 19 July 2011
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