September 7, 2017 / 9:55 AM / a year ago

Italy's Target 2 debt rises to 414.2 bln euros in August

MILAN, Sept 7 (Reuters) - Italy’s debt with the European Central Bank rose to 414.17 billion euros in August after previously declining for two months, Bank of Italy data showed on Monday.

Italy’s net debt towards the ECB’s Target 2 payment system, which settles cross-border payments in the euro zone, stood at 397.74 billion euros in July.

It hit a record high of 421.58 billion euros in May.

Italy’s August data for Target 2 is generally affected by the Treasury’s seasonally lower government bond issuance, reducing capital inflows in the period. Some 47.2 billion euros of government bonds came due over the month, while Rome sold 23.3 billion euros of bonds at auction.

Euro zone countries’ Target 2 positions are monitored because they highlight imbalances within the bloc and the potential for colossal sovereign defaults were it to fall apart, as that debt would then need to be repaid. (Reporting by Giulio Piovaccari, writing by Silvia Aloisi)

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