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ESBies as a Basis for a TARGET2 Settlement Mechanism

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  • Pasche, Markus

Abstract

The broadly discussed TARGET2 imbalances in the European Monetary Union result from the fact that there is no settlement mechanism such like the Interdistrict Settlement Accounts (ISA) in the Fed system. The proposal of Brunnermeier at al. (2011, 2017) of so-called European Safe Bonds (ESBies), although designed for different purposes, could be used as a remedy of this problem. In this brief note I suggest to use ESBies as a standardized safe asset for settling cross-border transfers of deposits.

Suggested Citation

  • Pasche, Markus, 2017. "ESBies as a Basis for a TARGET2 Settlement Mechanism," MPRA Paper 83012, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83012
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    References listed on IDEAS

    as
    1. Hans-Werner Sinn, 2012. "Target Losses in Case of a Euro Breakup," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(04), pages 51-58, December.
    2. Markus K. Brunnermeier & Sam Langfield & Marco Pagano & Ricardo Reis & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2017. "ESBies: safety in the tranches," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 175-219.
    3. Hans-Werner Sinn & Timo Wollmershäuser, 2012. "Target loans, current account balances and capital flows: the ECB’s rescue facility," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(4), pages 468-508, August.
    4. Manasa Gopal & Markus Pasche, 2012. "Market-based Eurobonds Without Cross-Subsidisation," Global Financial Markets Working Paper Series 2012-37, Friedrich-Schiller-University Jena.
    5. Peter Burgold & Sebastian Voll, 2012. "Mythos TARGET2 - ein Zahlungsverkehrssystem in der Kritik," Global Financial Markets Working Paper Series 29-2012, Friedrich-Schiller-University Jena.
    6. Alexander L. Wolman, 2013. "Federal Reserve Interdistrict Settlement," Economic Quarterly, Federal Reserve Bank of Richmond, issue 2Q, pages 117-141.
    7. Bindseil, Ulrich & König, Philipp Johann, 2011. "The economics of TARGET2 balances," SFB 649 Discussion Papers 2011-035, Humboldt University Berlin, Collaborative Research Center 649: Economic Risk.
    8. Sebastian Voll, 2014. "ISA vs. TARGET2 - Ein Vergleich der Voraussetzungen für den effektiven Ausgleich von Zahlungsüberweisungssalden," Global Financial Markets Working Paper Series 51-2014, Friedrich-Schiller-University Jena.
    9. Hans-Werner Sinn, 2012. "Die Target-Kredite der Deutschen Bundesbank," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(1), pages 03-34, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. TARGET2 Balances Mask Reduced Financial Fragmentation in the Euro Area
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-07-09 12:49:07

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    More about this item

    Keywords

    TARGET2 imbalances; ESBies; ISA;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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