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This article deals with the macro-economics of the Trans-European Automated Re- al-time Gross Settlement Express Transfer System (TARGET2). Originally, the TARGET2 was in-tended to solely function as a monetary arrangement for liquidity issues. It is shown that the TARGET2 contributes to a...
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the importance of TARGET2 for the stability of the euro area and points out that the proposal to limit the size of TARGET2 … liabilities essentially contradicts the idea of a monetary union. -- TARGET2 ; central bank balance sheet ; liquidity deficit …
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The paper scrutinizes the reasons for the European debt crisis, the implications for TARGET2 imbalances and options for surplus liquidity absorption within an asymmetric EMU. It is argued that starting from the turn of the millennium diverging fiscal policy paths and diverging unit labour costs...
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