Eurosystem debts do matter

Whittaker, John (2016) Eurosystem debts do matter. UNSPECIFIED.

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Abstract

Since September 2015, the European Central Bank has been publishing Target2 balances of the eurozone national central banks. But this presents an incomplete picture of intra-eurosystem debts because it does not include those arising from the issue of banknotes. The ECB also plays down the importance of Target2 debts as a “normal feature of the decentralised implementation of monetary policy in the euro area”. But if Greece were to leave the euro and its eurosystem debt (currently €114bn) were written off, other eurozone countries would bear the loss, in addition to losses on official loans. There is no effective mechanism for limiting eurosystem debts. And exit risk – the risk that Greece or some other eurozone country with large eurosystem debts will leave the euro – will always be present.

Item Type:
Other
ID Code:
78099
Deposited By:
Deposited On:
03 Feb 2016 15:28
Refereed?:
No
Published?:
Published
Last Modified:
27 Sep 2020 07:41