Intraday Patterns and Timing of TARGET2 Interbank Payments

Journal of Financial Market Infrastructures 1(2), 3:24

Posted: 26 Jan 2013 Last revised: 4 Feb 2013

See all articles by Marco Massarenti

Marco Massarenti

European Central Bank (ECB)

Silvio Petriconi

Bocconi University; IGIER

Johannes Lindner

European Central Bank (ECB)

Date Written: December 18, 2012

Abstract

This paper analyzes daily patterns in the settlement of payments in the European TARGET2 settlement system using a unique transaction-level data set. For the first time, we provide insights into the intraday patterns of bank-to-bank payments (a subset of all TARGET2 transactions) and identify intraday periods of highest activity. Next, we focus on the time dimension, looking in particular at settlement delay and its evolution over time. We show the effects of emergency monetary policy measures on payment timing and document the very high resilience of the system despite the financial and sovereign debt crises. Finally, our analysis hints at a link between trading activity on financial markets and interbank payments, showing the potential of large-value payment data for observing patterns and participants' behavior in financial markets.

Keywords: payment system, TARGET2, settlement delay, emergency monetary policy measures

JEL Classification: E42, E52, E58

Suggested Citation

Massarenti, Marco and Petriconi, Silvio and Lindner, Johannes, Intraday Patterns and Timing of TARGET2 Interbank Payments (December 18, 2012). Journal of Financial Market Infrastructures 1(2), 3:24, Available at SSRN: https://ssrn.com/abstract=2206782

Marco Massarenti (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Silvio Petriconi

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

HOME PAGE: http://silviopetriconi.github.io

IGIER ( email )

Via Roentgen 1
Milan, 20136
Italy

Johannes Lindner

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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