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dc.contributor.authorDe Grauwe, P-
dc.contributor.authorJi, Y-
dc.contributor.authorMacchiarelli, C-
dc.identifier.citationDe Grauwe, P., Ji, Y. and Macchiarelli, C. (2017) 'TARGET (im)balances at record level: should we worry?', in European Parliament. Directorate-General for Internal Policies of the Union. Policy Department A. Economic and Scientific Policy. Monetary dialogue November 2017 : in-depth analysis for the ECON Committee, pp. 1 - 23. doi: 10.2861/118636.en_US
dc.identifier.govdocPE 607.365-
dc.descriptionThis document was requested by the European Parliament's Committee on Economic and Monetary Affairs.en_US
dc.description.abstractTARGET is the payments system for making settlements between euro area economies and five other EU economies. Cross-border transactions generate claims/surpluses and liabilities/deficits among national central banks which “net out” for the system as a whole. These imbalances are manageable in relative terms, but look large in absolute terms. None are larger than one third of their corresponding public debt ratios; and despite a big build up in the 2010-13 period, the imbalances now appear to be on a non-expanding cyclical path. The implications for the EU economies and their policymakers are less easy. The main drivers, beyond the need to fund persistent current account deficits or surpluses, are the use of different funding sources (some outside the euro area), internal and external portfolio re-balancing, loose monetary policy and exchange rate risks. TARGET imbalances support quantitative easing, but are not driven by it. The main threats are the divergence that interrupts further economic integration; and the increasing liabilities taken on by the ECB since 2015. That said, self-correcting mechanisms are weak which makes symmetric adjustments by both creditor and debtor countries essential (because of the adding up constraint); and the difficulty that the imbalances cannot always be eliminated simply by balancing current accounts around the system.en_US
dc.publisherEuropean Unionen_US
dc.relation.ispartofseriesMonetary dialogue;November 2017 : in-depth analysis-
dc.relation.ispartofseriesEuropean Union. Directorate-General for Internal Policies of the Union. Policy Department A. Economic and Scientific Policy;IP/A/ECON/2017-04-
dc.relation.ispartofseriesEuropean Parliament. Committee on Economic and Monetary Affairs;PE 607.365-
dc.relation.ispartofseriesMonetary dialogue; November 2017 : in-depth analysis-
dc.subjectcentral banken_US
dc.subjectcross-border cooperationen_US
dc.subjectEconomic and Monetary Unionen_US
dc.subjecteconomic policyen_US
dc.subjecteuro areaen_US
dc.subjectexchange rateen_US
dc.subjectinternational financeen_US
dc.subjectmonetary policyen_US
dc.subjectpublic debten_US
dc.titleTARGET (im)balances at record level: Should we worry?en_US
dc.typeWorking Paperen_US
dc.relation.isPartOfTARGET (im)balances at record level: should we worry?-
pubs.commissioning-bodyEuropean Parliament-
Appears in Collections:Economics and Finance
Dept of Economics and Finance Research Papers

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