Briefing Paper on TARGET2 Balances

The Eurosystem’s often-misunderstood TARGET2 balances have again become a topic featured in op-eds and bank briefing documents. I’m posting this a bit late but here is a briefing paper I did on these balances that was submitted to the European Parliament in November 2017.  For those interested in a longer explanation of how the mechanics of how these balances come about, my 2013 paper covers a lot of different issues.