Italy’s Target2 debt rises to record high in December

ROME, Jan 10 (Reuters) – Italy’s liabilities towards other euro zone central banks rose to their highest ever level in December, central bank data showed on Monday.

Data published by the Bank of Italy showed Italy’s Target 2 debt stood at 589.98 billion euros ($668.51 billion) at the end of December compared with 544.91 billion euros in November.

The European Central Bank’s funding to Italian banks was up to 453.41 billion euros last month from 448.76 billion euros in November, 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.

($1=0.8825 euros)

Reporting by Antonella Cinelli, editing by Agnieszka Flak

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