Target-2 enters the political sphere, In Conversation with Daniel Hardy

Banking, Finance — By on September 10, 2018 at 5:31 AM

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Commentary: Target-2 enters the political sphere

By Frank Westermann in Osnabrück

A fierce debate is underway in Germany on the Target-2 balances, the intra-euro area settlement accounts. Target-2 claims of the Bundesbank, amounting to more than €900bn, constitute nearly 30% of German GDP; similar to the foreign reserves position of China (28% of GDP). This topic, so far debated mostly by academics, is entering the political sphere, raising questions about the potential impact of a member country leaving the euro. Markets should not be surprised if Target-2 imbalances remain high over an extended period.

Read the full commentary on the website.

Podcast: In Conversation with Daniel Hardy

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Daniel Hardy, head of the monetary and capital markets department at the International Monetary Fund, speaks to Mark Sobel, OMFIF’s US chairman.

They discuss the key findings of the IMF’s Financial Sector Assessment Program for the euro area, focusing on progress in banking union and supranational regulatory supervision, the crisis management and preparedness framework, and the health of European banks.

Listen to the recording, or search for OMFIF on your smartphone’s podcast app.

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