Do TARGET Balances Determine the Macroprudential Policy Effects?
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Malmierca, María, Do TARGET Balances Determine the Macroprudential Policy Effects? (February 16, 2020). Available at SSRN: https://ssrn.com/abstract=3541771 or http://dx.doi.org/10.2139/ssrn.3541771
The cross-border payment transactions between countries of the Eurosystem originate the TARGET balances of the national central banks vis-a-vis the European Central Bank. This payment platform contributes to financial integration in the Euro Area, what brings numerous advantages for the national and worldwide economies. However, it also entails the risk of fast crisis contagion and widespread economic and financial destabilization. Thus, there is an important role for macroprudential policy in t ...