As soon as the profit or loss of tax payers is concerned, the target debate is growing emotional, he said. Technically, the target balances are clearing items within the euro system. There is a risk of loss in case a state leaves the monetary union and cannot or is not willing to meet its liabilities toward the euro system. "The loss is transferred the the euro system as a whole."
However, Wieland is skeptical regarding the fact that target balances may reflect increasing capital flight. "In order to revive the interbank market, the sovereign bank nexus should finally be sufficiently disentangled", Wieland said.
Volker Wieland: "Funktionierendes Zahlungssystem" (Süddeutsche Zeitung)