TARGET2 balances: A shock absorber for the Euro area...

The initially positive reaction of financial
markets in the aftermath of the EU Summit
dissipated this week. Disappointment with
the final announcement and concerns about
implementation risks have led to renewed
tensions in financial markets, materialising in
pressure on the Euro and in the sovereign
bond space.
Another source of concern often mentioned
in our discussions with investors are the socalled
TARGET2 balances between Euro
area national central banks. Many regard
these as another destabilising factor.
However, the so-called TARGET2 balances
between Euro area national central banks
have, by acting as a safety valve, prevented a
disorderly correction of the imbalances in the
region. By moderating the adjustment, they
have bought policymakers time to address
the underlying causes of these imbalances.
Thus, the rising net claims of ‘core’ vis-à-vis
‘peripheral’ central banks in the Euro area
should be seen as symptoms—rather than a
cause—of the crisis.
TARGET2 imbalances reflect peripheral
countries’ continuing need for external
financing and are therefore complementary
to the persistent large current account deficits
seen in the periphery. However, these
imbalances do not per se represent an
additional risk for national central banks
beyond that already stemming from the
ECB’s very generous liquidity provision.
Only if one or several countries were to
decide to leave the Euro area would these
imbalances reflect a genuine new risk for
those central banks that have acquired net
claims vis-à-vis other central banks.

来源：

高盛亚洲

撰写时间：

2011-12-16