The Economics of Target Balances: From Lehman to Corona 1st Edition Hans-Werner Sinn

The Economics of Target Balances: From Lehman to Corona – Ebook Instant Download/Delivery ISBN(s): 9783030501693,3030501698

Product details:

• ISBN-10 ‏ : ‎ 3030501698
• ISBN-13 ‏ : ‎ 978-3030501693
• Author(s): Hans-Werner Sinn

Target balances are the largest single item in some of the balance sheets of the Eurosystem’s national central banks (NCBs), and yet very little is known about them by the general public and even by economists. This book shows that Target balances measure overdraft credits between the NCBs that resemble ordinary fiscal credit and which have grown disproportionately, exceeding one billion euros. There is, however, no parliamentary legitimation for the Target balances. The book sheds light on the economic significance of the balances, questions their limitlessness, and addresses controversial views that have been expressed regarding them. It uses the Target statistics to analyze the course of the euro crisis and the ECB’s policy reactions from the time of the Lehman bankruptcy up to the outbreak of the Corona crisis. It analyses the credit risks involved for the Eurosystem and concludes with a reform proposal.

This book will be of interest to non-specialist economists and policy makers.

Table contents:

1. Target: An Obscure Aspect of the Eurosystem
2. The Target Credit
3. Current Account, Capital Movements and Target Balances
4. The Cash Balance
5. How the Target Balances Came About: The First Phase of the Crisis
6. The Case of Greece
7. External and Internal Money
8. The QE Program and the Target balances
9. The Effective Rate of Interest on Target Balances
10. Interest Spreads and Tiering
11. The Corona Crisis
12. The Risks of Target and Cash Balances
13. Conclusions and Policy Recommendations
Correction to: The Economics of Target Balances

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