The Economics of Target Balances: From Lehman to Corona

Contents
Abbreviations
List of Figures
List of Boxes
Chapter 1: Target: An Obscure Aspect of the Eurosystem
	1.1 The Meaning of Target Balances
	1.2 Mirroring the Eurozone Crisis
Chapter 2: The Target Credit
	2.1 Why Target Balances Measure Credit
	2.2 The Decision for Public International Credit
Chapter 3: Current Account, Capital Movements and Target Balances
	3.1 The Basic Accounting Identity
	3.2 Similar Balances in Other Payment Systems
Chapter 4: The Cash Balance
	4.1 The Measuring and Meaning of Cash Balances
	4.2 The IMF’s Methodology
Chapter 5: How the Target Balances Came About: The First Phase of the Crisis
	5.1 The Phases of the Crisis
	5.2 Opening the Sluice Gates
Chapter 6: The Case of Greece
	6.1 The Public Credit for Greece
	6.2 Bailing Out Foreign Investors
	6.3 Sudden Stop, Capital Flight and Current Account Finance
Chapter 7: External and Internal Money
	7.1 Some Definitions and Identities
	7.2 External Money Crowds Out Internal Money: The Case of Germany
Chapter 8: The QE Program and the Target balances
	8.1 A Liquidity Flood Named QE
	8.2 The Great Debt Restructuring
	8.3 The Example of Italy
	8.4 Triangular Transactions with Investors Outside the Eurozone
Chapter 9: The Effective Rate of Interest on Target Balances
	9.1 Why the Interest Problem Is Relevant
	9.2 Legal Provisions for Intra-Eurosystem Interest Payments
	9.3 Pooling: A Comprehensive Way of Calculating Intra-Eurosystem Interest on Target and Cash Balances
	9.4 Primary Seignorage, Secondary Seignorage and the Definition of the Marginal Effective Rate of Interest on Target and Cash Balances
	9.5 The Interest Formula
	9.6 The Currently Negative Rate of Interest on Target and Cash Balances
	9.7 Compound Interest and the Transfer of Liquidity and Income
Chapter 10: Interest Spreads and Tiering
	10.1 The Interest-induced Shift of Liquidity, Interest Spreads and the Elasticity of Local Money Supply
	10.2 Differentiating the Interest Rates by Way of Tiering
	10.3 The Effective Marginal Rate of Interest with Non-uniform Policy Rates
	10.4 A Lesson to be Learned
Chapter 11: The Corona Crisis
	11.1 The Pandemic Infects the World
	11.2 The Initial Impact of the Crisis on the Target Balances
	11.3 The Rescue Measures
Chapter 12: The Risks of Target and Cash Balances
	12.1 Target and Cash Balances were Built Up in Exchange for Goods and Assets
	12.2 Exit Risks, Exemplified by the Case of Italy
	12.3 Risks of a Euro Break-Up
	12.4 Risks without Exits
	12.5 The Blackmailing Potential of Target and Cash Balances and the Dutch Disease
Chapter 13: Conclusions and Policy Recommendations
	13.1 The Findings of This Book
	13.2 The Pros and Cons of Target and Cash Balances
	13.3 Reform Options
References
	Statistical References
Index