Target2

Over the past week, European institutions have shown no qualms about bullying, arm-twisting, and humiliating a sovereign nation and its people. This is no union – this is a fiasco.

I’ll be watching a number of things in 2013 in order to get a better sense of what the future will bring. On January 22 Princeton University Press will be publishing my book, The Great Rebalancing: Trade, Conflict, and the Perilous Road…

By Paul De Grauwe, Professor of international economics, London School of Economics, and former member of the Belgian parliament and Yuemei Ji, Economist, LICOS, University of Leuven This post was first published at VoxEU Germany’s large…

It is clear that lending to Spanish banks is now funded entirely via TARGET2 (borrowing from the rest of the Eurosystem) rather than with deposits. In fact deposits at the Bank of Spain by the Spanish government and Spanish banks (excess…

Quick post here to highlight then continued losses in Spanish property markets and the effect on Spanish banks. House prices in Spain were down 11.2% year-on-year in July. That's the largest fall since March 2011 and it brings all in losses…

The Target2 problem is really a manifestation of an accelerating bank run. I have said many times, this is my major concern, the bank runs and the resulting shrinking credit and likely deadweight loss that accompanies them.

That Weidmann now wishes to publicly claim he is concerned about risk associated with the Bundesbank's Target2 credit does not simply mean that this is a truth that has now been "acknowledged". I would guess that the sober Bundesbank…

Karl Whelan finds that a recent analysis by Hans-Werner Sinn on an alleged ECB bailout is incorrect. Willem Buiter is now out with a commentary on the same issue corroborating Whelan’s view. Below are the bullet points he highlights in his…

In a recent column at VoxEU , Hans Werner Sinn of the prestigious Institute for Economic Research claims that the German Bundesbank is effectively propping up banks across the Eurozone’s periphery. He adds that doing this risks a major…