Italy: Target2 debt edges up in February

Milan: Italy’s liabilities towards other euro zone central banks slightly rose in February, central bank data showed on Monday.

Data published by the Bank of Italy showed Italy’s Target2 debt stood at 568.05 billion euros ($617.02 billion) at the end of February compared with 564.80 billion euros in January.

The European Central Bank’s funding to Italian banks was almost steady at 453.5 billion euros last month from 453.4 billion euros in January, the data also showed.

A country’s Target 2 position is monitored as a sign of financial stress and imbalances within the euro zone.

Target2 debt could rise, for example, due to capital outflows. It also reflects increased reliance of domestic banks on ECB’s funding. Italy started publishing its Target2 debt position in September 1997.