Journal of Financial Market Infrastructures

Communities and driver nodes in the TARGET2 payment system

Marco Galbiati and Lucian Stanciu-Viziteu


With a daily turnover exceeding €2.3 trillion, TARGET2 (T2) is one of the largest interbank payment system in the world, settling the vast majority of interbank payments in euros. Moreover, T2 is the only system of its kind operating on a transnational scale, settling money transfers across twenty-three countries. This paper first describes T2 by means of classic network measures. Then, it applies novel methods developed in network theory to uncover two additional features of T2: driver nodes and communities. The former concept identifies systemically important banks; the latter singles out regions of intense liquidity circulation and thus uncovers the real, hidden geography of euro transfers.

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