Series: Analytical Articles.
Author: Pana Alves, Antonio Millaruelo and Ana del Río.
Topics: International Economy, Spain, Monetary policy, European Union, Financial analysis, Economic situation.
Full document
Summary
The TARGET2 platform, which is owned by the Eurosystem, processes payments in euro
with reserves, i.e. central bank money. The cross-border payment transactions channelled
through this platform give rise to central bank claims and liabilities which, when aggregated
and netted, produce the so-called TARGET balances. Since 2015, when various extraordinary
monetary stimulus measures were introduced by the ECB, there has been a marked
increase in aggregate TARGET balances, to levels above those reached during the sovereign
debt crisis which took place in the first few years of the current decade. Unlike then, the
recent developments do not reflect financial stress or general funding problems in euro area
economies, as during the sovereign debt crisis, but are instead mainly linked to the
execution of the Eurosystem’s asset purchase programme (APP).