Central banks: Even in America, the balances are rising

the bond purchases by Central banks can have the balances in payment systems are on the rise. This knowledge is not only from the European Target-2 System, wher

Central banks: Even in America, the balances are rising

the bond purchases by Central banks can have the balances in payment systems are on the rise. This knowledge is not only from the European Target-2 System, where the balances are in Germany for controversial debates. Also in the United States, we can observe that in the transfer system ("Fedwire"), the balances between the regional Central banks ("Federal Reserve Banks") on the increase then, after the decided monetary policy purchases of securities.

Gerald Braunberger

publisher.

F. A. Z.

While in the Eurozone such purchases, particularly the balance of the Deutsche Bundesbank to rise, this effect can be in the United States for the Federal Reserve Bank of New York watching. Currently, the balance is almost half a trillion dollars in the Plus, the is by American standards a very high value. The American programs for the purchase of securities today, however, also greater than in the financial crisis.

Key differences

In the United States, twelve regional Federal Reserve Banks together with the Washington-based centre for decision-making, the Federal Reserve Board, the so-called Federal Reserve System. Unlike in the Ostend district of Frankfurt-based European Central Bank, the Board does not act in Washington even as a Bank. In the American payments, the regional banks have claims on and liabilities to the other regional banks, but not to the Board in Washington.

This is different in Europe: Here, the individual national Central banks such as the Deutsche Bundesbank Target 2 no direct receivables and liabilities against each other. Entertain you instead, receivables from and liabilities to the ECB. That is to say: Target 2, the Bundesbank has no direct claim to the Banca d’Italia, but a claim against the ECB, which in turn has a claim to the Banca d'italia.

another difference is in dealing with the balances. While in Europe, complained especially of the German critics, balances are not balanced and, therefore, over the years can build up in the United States is always 1. April a compensation. However, as for the balance between the twelve regional banks and the current balances to 1. April be used, but the average balances for the last twelve months, you will not be charged to the accounts is usually exactly zero. Nevertheless, the American system slows down in comparison to the European in the longer term, the build-up of balances.

In the United States are not executed securities transactions in the framework of the monetary policy alone, the Federal Reserve Bank of New York; the other regional banks operate. The Federal Reserve Bank of New York purchased securities are placed in a Pool, called the Soma, which is then assigned to each of the regional banks within the framework of annual adjustments, the balances referred to in economic indicators. To give an example: The Federal Reserve Bank of San Francisco had not be before the end of 2018 (newer data) of securities of approximately 500 billion dollars in their balance sheet. These papers were not purchased by her, but by the Federal Reserve Bank of New York is transferred to you. This special position of the Federal Reserve Bank of New York explained why their balances were in the American payment is always strongly negative, if the American monetary policy has decided to value paper purchases.

Updated Date: 07 July 2020, 04:19

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