The Bank of England operates the United Kingdom's Real-Time Gross Settlement (RTGS) infrastructure for the settlement of the main electronic sterling payment systems. This infrastructure plays a vital role in the safe functioning of the UK financial system, and therefore in maintaining financial...

This paper analyses the issue of the dynamics of the TARGET2 system balances during the sovereign debt crisis, when some countries registered a decisive inflow of the central bank liquidity and others showed an outflow. The dynamics in the TARGET2 are here explained as being due to a fall in the...