TARGET2 transactions for 2013 : Down 22%?

I've been tracking the level of financial transactions in Europe for some time. One useful place to look is on the European Central Bank's website where you can find all the figures for the TARGET2 and EURO1/STEP2 systems month by month. Target2 stands for Trans-European Automated Real-time Gross settlement Express Transfer system, and you can see a five minute video about it here.

I've just calculated the totals for each country in 2013 which I have put in the following table.

As you can see, the overall totals are down around 22% on 2012 - a mere €493 trillion. Euro 1 transactions were also down about 16% at around €49 trillion, to make a total of €542 trillion.

What's going on? Do you think that the traders have started calming down?  After all, 2013 was the year when some European countries started to introduce a small Financial Transaction Tax on some sorts of trading. Perhaps it is starting to have an impact?

I rather doubt it. The fact is that while 23 of the 27 EU countries use TARGET2, one country in particular does not - namely, my dear compatriots in the UK. And the UK is the world leader in off the record book transactions - so called OTC (Over the Counter) trading. They are also very keen to provide their customers with a way to trade that avoids anyone seeing what it going on.

I bet you that the real amount trading hasn't dropped at all. It's just going through the City of London's deliberately opaque settlement systems. Systems like the one handled by LCH ClearNet Ltd which handled  £862 trillion in 2008 but strangely has not reported any numbers to the BIS at all since 2010.