| Popis: |
This paper presents a simulation exercise assessing the ability of Italian banks to fulfil their payment commitments in TARGET2, the Euro area Real Time Gross Settlement System, in the event of a contraction in the supply of funds on the overnight unsecured money market. The results of the exercise - which was carried out with reference to two reserve maintenance periods: from 12 November to 9 December 2008, during the acute phase of the crisis, and from 11 November to 7 December 2009 - show that even a drastic fall in trading on the interbank market would have caused limited effects on the functioning of the system. These broadly positive results depend basically on two factors. First, both simulations refer to periods in which the ratio of unsecured overnight loans to the total quantity of settled payments was significantly lower than in the period preceding the crisis; furthermore, in both periods the average level of liquidity on participants’ settlement accounts was relatively high due to the reliance of banks to the Eurosystem credit facilities. |
