MILAN, March 7 (Reuters) - Italy’s Target 2 liabilities rose to a new record high in February signalling growing imbalances in the position of different central banks within the euro zone.
The Bank of Italy’s position within the Target 2 system, which settles cross-border payments in the euro zone, is monitored because its increase can indicate financial stress.
The Bank of Italy said on Tuesday its Target 2 position rose to 386.1 billion euros ($408 billion) in February from 364.7 billion euros in January.
Italy’s Target 2 position worsened during the euro zone’s sovereign crisis as foreign investors dumped Italian assets and withdrew funding to its banks.
The Bank of Italy has said the widening seen last year was driven instead by Italians diversifying, moving away from government bonds and putting a larger share of their savings into foreign assets, as well as by the bond purchases carried out by the European Central Bank as an extraordinary monetary policy measure.($1 = 0.9460 euros) (Reporting by Valentina Za, editing by Giulia Segreti)