Monitoring Ireland’s Payments using TARGET2

Claire Downey, Paul Lyons and Terry O'Malley ()
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Claire Downey: Central Bank of Ireland
Paul Lyons: Central Bank of Ireland

Quarterly Bulletin Articles, 2017, 81-95

Abstract: With the aim to develop indicators to better understand the interconnectedness of the Irish banking system and to identify the build-up of potential systemic risks, this article describes TARGET2-IE, Ireland’s component of the Eurosystem’s large value payment system (TARGET2). In doing so, we seek to highlight how close monitoring of payments data can confer a deeper understanding of the components that contribute to the smooth functioning of the Irish economy and a stable financial system. Following a description of TARGET2-IE, we highlight the underlying topology (map) of Ireland’s interbank and customer payment networks. We identify key bank connections arising from payment flows between banks and introduce indicators for systemic risk monitoring. The indicators provide information on the relative importance of banks in the networks, liquidity conditions, key connections and payment inflows and outflows.

Date: 2017-04
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Persistent link: https://EconPapers.repec.org/RePEc:cbi:qtbart:y:2017:m:04:p:81-95

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