ESBies as a Basis for a TARGET2 Settlement Mechanism

Markus Pasche

MPRA Paper from University Library of Munich, Germany

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.

Keywords: TARGET2 imbalances; ESBies; ISA (search for similar items in EconPapers)
JEL-codes: E42 F32 F33 F36 F45 (search for similar items in EconPapers)
Date: 2017-11-29
New Economics Papers: this item is included in nep-mac
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