One of this blog's most recurrently popular posts is a 2012 ditty entitled the Idiot's Guide to the Federal Reserve Interdistrict Settlement Account. The Interdistrict Settlement Account, or ISA, is a highly esoteric "plumbing" mechanism that lies at the centre of the Federal Reserve System. After a century of being ignored, it suddenly became a popular topic for discussion in late 2011 and 2012 as the breakup of the euro became a real possibility. Groping for a fix, European analysts turned to the world's other large monetary union, the U.S. Federal Reserve System, to see how it coped with the sorts of monetary problems that Europe was then experiencing.

Here's a short explanation of the ISA. Consider that there is no such thing as a unified Federal Reserve dollar. Rather, both the paper dollars that you hold in your wallet and the electronic reserves that a private bank holds in its vaults are the liability of one of twelve distinct Federal Reserve district banks. Thanks to the convention among these Reserve banks of accepting each others dollars at par, a 1:1 exchange rate between each of these twelve U.S. dollar brands prevails. This gives rise to the useful mental short cut of assuming that there is one homogeneous dollar brand. But to do so ignores the heterogeneity at the core of the system —we can imagine worlds, for instance, in which one district's dollars, say those of the St Louis Fed, are considered to be so inferior to the rest that the other Reserve banks will only accept "St. Louis's bucks" at a discount.

All inter-district flows between Reserve banks must be settled, which is where the ISA comes into the picture. The ISA is a ledger that tracks the various imbalances that accrue between Federal Reserve banks. Each April that imbalance is settled by a transfer of assets from debtor to creditor Reserve banks, so that if St. Louis is owing and San Francisco is owed, then bonds will flow from the former to the latter, reducing each district's respective ISA balance (or increasing it) to a sufficient level.

I'm happy to say that my ISA post was useful to a number of researchers, including Karl Whelan (pdf), Kevin H. O’Rourke and Alan M. Taylor, and most recently, Alexander Wolman (pdf), who all made reference to it in recent papers. I like to think that this demonstrates the second purpose of the econblogosphere. The first purpose, of course, is to swarm over polished work by those like Piketty and Reinhart/Rogoff searching for chinks in the armour. The second is to act as an advance scout of sorts. When a completely new problem crops up, a blogger can quickly pump out a few posts, establishing a beachhead from which the main army—academics with time, money, and resource—can begin to launch a larger-scale attack.

While scouts can provide useful hints on where to launch initial sorties, they will always make a few errors, and I want to draw attention to one error I made in my ISA post. I speculated that the Federal Reserve banks may not have bothered to settle the ISA in 2011. Given a visual inspection of the various imbalances that had arisen between several of the Reserve banks, it appeared that the Richmond Fed in particular had been allowed to carryover a large deficit while the New York Fed (FRBNY) was stuck with an outstanding credit. Luckily for the small group of folks interested in the ISA, Federal Reserve researcher Alexander Wolman has recently provided some clarity on this issue.

Wolman has written the definite explanation of how the ISA functions and it is well worth your time if you want to discover how this fascinating mechanism works. (In defense of my old Idiot's Guide, note that I did manage to incorporate the destruction of the Death Star scene into it — I doubt Alex's editors would let him get away with that). He also goes through the data to show how the ISA settled in April 2011. I had originally focused on the New York Fed's ISA balance as the basis for my suspicion that settlement may not have occurred—the FRBNY's ISA balance had not fallen by the proper amount over the settlement month. But if you look at the FRBNY's securities balance on its balance sheet, you'll see that it rose by $100-$150 billion, an amount sufficient to settle the debts that other Reserve banks owed it. If you care to explore more deeply, Alex deals with this on page 135 of his article. I'm tickled pink that he managed to "settle" this bit of trivia since it has been a recurring topics on this blog. (See here and here).

I should point out that the 2011 episode interested me because if non-settlement had occurred, then the ISA would impose very weak constraints on payments imbalances arising between the various district Reserve Banks. European analysts, who were looking to the U.S. for inspiration, needed to know whether the ISA imposed stern limits on imbalances or lenient ones.

Like the Fed, the ECB is composed of a number of member banks, or national central banks (NCBs). Each issues their own brand of Euro while accepting all other Euros at par, thereby ensuring a smooth 1:1 exchange between the various Euros. Unlike the Fed, the ECB has no settlement mechanism. Imbalances that arise between member banks can continue growing perpetually. This is what appeared to be happening between 2008 and 2012 as European depositors, wary of a break up the Eurozone, fled the GIIPS banking systems for safe havens like German and Dutch banks, resulting in the emergence of massive deficits and credits between the various member NCBs. The chart below illustrates the size of these imbalances, which have since shrunk.

Source: Euro Crisis Monitor, Osnabrück University

A number of analysts, led by Hans Werner Sinn, felt that a U.S.-style ISA settlement mechanism should be grafted on to the European payments system. In theory, this would impose strict discipline on NCBs and prevent imbalances from emerging. Many, including myself, felt that this sort of discipline might be a bad idea.

But a better rebuttal of the proposed European ISA is that the Federal Reserve ISA was never the stern mechanism that folks like Sinn made it out to be. Though my point about 2011 non-settlement is false, other features of the ISA provide for long settlement delays, including the "rediscounting mechanism" that I mentioned in my Idiot's Guide. However, the best person to learn from on this topic is economic historian Barry Eichengreen who, in the video that I've linked to below, provides a definitive historical overview of the ISA.



While the whole video is worth watching, I'm going to draw attention to a chart that Eichengreen shows at around minute 14-15 which I reproduce below.

Source: Federal Reserve Bulletin, 1922

During 1920 and 1921, large and persistent imbalances between Federal Reserve banks emerged, much like the imbalances that have plagued the Eurosystem since the credit crisis. It would seem that the Fed, just a young pup at the time, faced the very same problem that the ECB began to face just nine years after its debut and, much like the ECB, it chose to handle it by allowing for non-settlement. Eichengreen (and Mehl, Chitu & Richardson) has an upcoming paper that explores the long history of Reserve bank "mutual assistance", although for now you'll have to be content with the video.

The European payment imbalances debate (or Target2 debate) has long since died out. Germany's ever-growing creditor position halted in 2012 and has been shrinking ever since while debtors like Italy, Spain, and Greece have seen their negative positions return towards zero. No one talks about intra-Eurosystem imbalances or Euro breakup anymore, at least not on the blogosphere. But I have no doubt that somewhere in the ECB's deepest catacombs a group of European monetary architects are debating if, how, and when to import an ISA-style settlement mechanism into Europe. Let's hope that they are very careful in their approach and consider the softest possible solution.

(Disclaimer: this article is geeky. If you want to follow it, you should already know a bit about the European Target2 imbalances debate (here is a good intro) and have read my description of the US Interdistrict Settlement Account)

There is a tension involved in being a lender of last resort. Central banks are supposed to provide liquidity to solvent but temporarily illiquid institutions during a liquidity crisis. But they're not supposed to go as far as keeping bankrupt banks or governments alive. Hans-Werner Sinn’s proposal to import the Federal Reserve's Interdistrict Settlement Account (ISA) into the Eurosystem seems to me to be an attempt to impose on National Central Banks (NCBs) the discipline necessary to prevent them from crossing this almost transparent line.

But an ISA-type settlement mechanism in a European setting threatens to not only prevent NCBs from crossing the line; it could prevent them from fulfilling even their basic duty as lender of last resort. This would be dangerous. The very fear that an NCB is limited in acting as lender of last resort could lead to self-fulfilling runs on NCBs during crisis. Faced with the requirement of fulfilling its role of lender of last resort or meeting an ISA-type settlement requirement, it is likely that settlement will be sacrificed, resulting in an embarrassing loss of face and credibility to the Eurosystem as a whole.

Is the Federal Reserve’s ISA binding?

A large part of Sinn’s yearning for an ISA-style mechanism comes from the idea that “there is quite a penalty for District Feds that create and lend out more than their fair share of the monetary base. This is the reason why a TARGET-like problem has never arisen in the US to this day.” [source]

I disagree with him on his views on the ISA. While ISA settlement certainly imposes a constraint on district Reserve banks, it is a distant constraint. I call it distant because other “balancing” mechanisms (which I'll outline below) come prior to final settlement. As a result of these balancing mechanisms, district Reserve banks are unlikely to ever come close to settlement failure and therefore the ISA does not genuinely discipline them.

A hypothetical ISA settlement failure would happen if a district Reserve bank, in fulfilling its duty as lender-of-last resort, perpetually lent reserves to regional member banks facing crisis. If these newly-created reserves were to be moved to neighbouring districts, the district Reserve bank would be required to settle these capital outflows with ISA-permitted settlement media. In times past, gold was the settlement media, but nowadays it its System Open Market Account (SOMA) assets. All assets purchased by the Federal Reserve system in the open market are assigned to this account. Each district Reserve bank in turn receives an allocation of SOMA. Should the crisis be protracted and outflows continue, the district Reserve bank will eventually run out of SOMA assets and fail to settle its ISA debts.

But there is an important mechanism at work that prevents prolonged district Reserve bank loans to failing member institutions. In the US, insolvent banks are quickly shuttered and sold off by the Federal Deposit Insurance Corporation (FDIC). This is called bank resolution. Secondly, there are few regulatory barriers and certainly no cultural or linguistic boundaries to overcome when it comes to US bank mergers. A private bank in the Cleveland district can easily buy a weakened bank in the San Francisco district and vice versa.

Due to quick resolution and a relatively painless merger process, district Reserve banks need not lend to weak private member banks for extended periods of time. As a result, district Reserve banks don’t create the huge amounts of reserves that, when transferred to another district, might lead to an ISA settlement failure. Contrary to Sinn’s belief, the necessity of ISA settlement is only a distant constraint on district Reserve banks.

Potentially lethal problems with a European ISA

Sinn wants to graft an ISA-style mechanism onto the Eurosystem. The idea seems to be that if NCBs were to face a periodic day-of-reckoning that required the settlement of outstanding Target2 debts with real assets, then they would be dissuaded from incurring irresponsible debts in the first place.

I agree with Sinn on the idea of implementing some sort of Target2 settlement mechanism. Even Keynes, in devising his International Clearing Union, wrote:

Measures would be necessary to prevent the piling up of credit and debit balances without limit, and the system would have failed in the long run if it did not possess sufficient capacity for self-equilibrium to prevent this. Proposals for an International Currency (or clearing) Union, February 11, 1942

But there is a certain danger in implementing an ISA-style settlement mechanism without the same balancing mechanisms we see in the US. This danger arises because the settlement mechanism interferes with the lender of last resort role of NCBs. Acting as lender of last resort is a duty that all central banks must be left free to exercise. The famous line from Bank of England Director Harman on the quelling of the 1825 crisis comes to mind:

We lent it [pounds] by every possible means and in modes we had never adopted before; we took in stock on security, we purchased Exchequer bills, we made advances on Exchequer bills, we not only discounted outright, but we made advances on the deposit of bills of exchange to an immense amount in short, by every possible means consistent with the safety of the Bank, and we were not on some occasions over-nice. Seeing the dreadful state in which the public were, we rendered every assistance in our power.

As long as US-style balancing mechanisms exist —  both a quick resolution mechanism and the ability to freely merge banks  —  it is unlikely that an NCB, in discounting freely, will create the incredible volume of reserves that might lead to a European ISA settlement failure. But my understanding of European banking is that bank mergers are not easy (see pdf). Nor has a proper European wide resolution protocol been established. Perhaps readers can elaborate on this.

So let's imagine that Sinn’s plan to implement an ISA-style settlement mechanism is adopted without the balancing mechanisms I've previously mentioned. The next time a crisis hits, the NCBs will discount freely, as they should. They'll have to do a lot of it, since problem banks aren't being resolved, nor are they being merged. There will probably be capital flight from one country to another. This will bring the intra-Eurosystem settlement mechanism into play, requiring the transfer of settlement asset from debtor NCBs to creditor NCBs.

The problem is that as an NCB gets closer to settlement failure, depositors will flee ever faster to other European NCBs. Depositors will do this because they anticipate that settlement failure will lead to temporary inconvertibility of that NCB’s euroliabilities — better to get out while it's still possible, goes the thinking. This effect is perverse, since the very threat of settlement failure leads to the self-realization of settlement failure.

What does an NCB do when it hits Sinn’s settlement constraint? Does an NCB cease acting as the lender of last resort and settle? Or does it continue to lend and let settlement fail?

Relaxing the law is embarrassing

One of the lessons of monetary economics is that there are grave consequences to stepping aside as lender of last resort. Because of this, the most likely answer to the above question is that the law concerning Eurosystem settlement will be temporarily put aside to allow for continued lending.

There is a long tradition of setting law aside to allow for lender of last resort purposes. Peel’s Act of 1840 attempted to constrain credit creation by dividing the Bank of England into an Issue Department and a Banking Department. The Issue Department issued banknotes 100% backed by gold. The Banking Department issued deposits which were convertible into these notes. During a crisis, the Banking Department would be swamped with requests for notes. But Peel’s Act prevented the Issue Department from providing the Banking Department with bank notes. As a result, people grew even more anxious to withdraw existing notes from the Banking department, igniting a run. In order to save the Banking department from insolvency, during each crisis the government would issue a rather embarrassing public letter saying that the legal separation between the two departments was temporarily null. As a result, the Issue department could lend notes to the Banking department, and the crisis ended.

Much like the Bank of England of the 1800s, it would be embarrassing for the Eurosystem to adopt Sinn's ISA-style settlement mechanism only to have to publicly annul settlement each time a crisis hits and lender of last resort action is necessary. Far better to promote the emergence of strong balancing mechanisms like bank resolution and mergers, and only after that implement some sort of settlement mechanism. The former will dull the bite (and potential embarrassment caused by failure) of the latter.

PS. Karl Whelan is circulating a draft paper on Target2 and is looking for constructive criticism. I haven't commented on his paper in this post as I'm waiting for his final version. But drop by here to read & comment.

PPS. As a free banker, I don't support monopoly banking. I took off my free-banking hat to write this.

Bankers clear and settle with each other at a clearing house

Perry Mehrling had in interesting comment about how to settle the Eurosystem's Target2 imbalance problem.

If there were Eurobills, balances could be settled periodically by transfer of assets, just as is done in the Federal Reserve System. More precisely, if there were a System Open Market Account at the ECB, in which all of the national central banks held shares, settlement could be made by transfer of shares.

Perry is talking about adapting the structure of the Fed's Interdistrict Settlement Account to Europe. To understand the ISA, check out my Idiot's Guide to the Federal Reserve Interdistrict Settlement Account. In short, the 12 regional Reserve banks run up debts and credits to each other over the course of the year due to changes in payments flows. These debts and credits are settled each year by transferring securities that have been bought in open market operations from debtor Reserves banks to creditor Reserve banks.

The Eurosystem, on the other hand, doesn't require that the clearing debts wracked up by the various National Central Banks (NCBs) be settled. Which is odd. Not even Keynes's ICU would have allowed infinite debts, and Keynes was a forgiving sort of guy.

Perry's idea is that with the Eurosystem embarking on a program of Outright Monetary Transactions (OMTs), maybe the securities amassed will allow for a mechanism to settle intra-Eurosystem imbalances. Debtor NCBs like the Bank of Greece will have to transfer OMT securities to creditor banks like the Bundesbank. Perry specifically discusses the idea of having each NCB own shares in the OMT portfolio and have these shares transferable so as to facilitate settlement.

I like this idea and think it can be twinned with the already existing ECB capital key. What is the capital key?

All NCBs have an ownership stake in the overlying ECB. The relative amounts held by each are determined by the capital key. The key's weights are based on relative population and GDP. Germany for instance, has been given an 18.9% weighting in the capital key. Greece has been given a 1.96% weighting.

The ECB holds a unique set of assets on its balance sheet (see year-end 2011 statements). These have been transferred to it from the NCBs. First, it holds 16 million ounces of gold, worth around €21b. It also holds around €41 in forex reserves denominated in yen, dollars, and more. Lastly, it holds a few assets purchased during previous open market campaigns. Also worth considering is that the Eurosystem's total profits are paid out according to the capital key. This means that the profits yielded by assets held by the Bank of Greece don't necessarily get paid out to the BoG... they get amalgamated with all NCB profits and then allocated to each individual NCB according to the capital key. So having a big weighting in the capital key is definitely worth something.

Say that going forward all OMT purchases are conducted through the ECB and not the NCBs. That means that in addition to its gold and forex position, the ECB gets even bigger, and shares in the capital key are rendered more meaningful.

You can then institute a Fed-style settlement program by letting each NCB's weighting in the capital key float. Each year debtors get their share in the capital key lowered. Creditors get their's increased. That adds some quid pro quo to intra-Eurosystem balances. What happens if a central bank's representation in the capital key were to fall below zero because of persistent capital flight? Then the national government would have to recapitalize their respective NCB's contribution to the ECB so that it's portion of the key rises back to 0%. Or you could soft-pedal the whole thing and institute some sort of broad system of reforms a country has to initiate once it falls below 0%. Either way, the system is redesigned to have a tendency to equilibrate.

Is such a tendency necessary? I leave you with some words from Keynes's Proposals for an International Currency (or clearing) Union, February 11, 1942:

Measures would be necessary to prevent the piling up of credit and debit balances without limit, and the system would have failed in the long run if it did not possess sufficient capacity for self-equilibrium to prevent this.

Last year and earlier this year, debate concerning the Target2 mechanism in Europe and its growing imbalances shed some light on the equivalent institution in the US, the Interdistrict Settlement Account (ISA). The argument has been made to import the ISA structure into Europe, in particular, the yearly settling of accounts between district Reserve banks. If the ECB were to operate this way, the idea goes, then there would be some sort of quid pro quo on Target2 imbalances - European national central banks (NCBs) would not be able to accumulate debts to each other ad infinitum.

The observation was made that contrary to what one might expect, the ISA at the time did not seem to be balancing. Thus the idea that adoption of the Fed model would impose "firm limits" on intra-Eurosystem credit is invalid, since the Fed doesn't seem to always impose settlement on district Reserve banks. This April, though, the ISA seems to have been settled, as the charts below will illustrate. Nevertheless, the point still stands that the Federal Reserve System may choose to constrain itself by requiring interdistrict settlement or it may choose to forego that restraint.

Michiel Bijlsma and Jasper Lukkezen have a very good article on the Bruegel blog that deals with the question: why is there no Target2 debate in the US?

The Belgium-based think take Bruegel recently linked to my guide to the Federal Reserve Interdistrict Settlement Account. In my ongoing attempt to ensure the Target2 debate doesn't founder on faulty comparisons to the Interdistrict Settlement Account, here's another post.

Although they have a better grasp on how the ISA works than most, the authors Michiel Bijlsma and Jasper Lukkezen do make an important error:

The important difference between Target 2 and ISA, however, is that in the US all Reserve Banks are owned by the federal government. This means that in the US it is possible to safeguard the integrity of the system by changing the settlement rules. This is as exciting as a game of monopoly among friends. As all Federal Reserve banks are owned by the federal government, a loss in Richmond is irrelevant when there is an equal gain in New York. In the Eurozone, however, the ECB is owned by the national governments via the national central banks, not by the European Union as a whole. When one would change the settlement rules here – for example by discounting claims – this means a transfer across countries.

In actuality, all twelve Federal Reserve district banks are owned by their member private banks. What allows the Fed to change settlement rules is not any ownership position in the Fed (they have none) but the system's constituting articles, or Federal Reserve Act, which put the preservation of the par value of US dollar-denominated banking liabilities above the necessity of the system settling.

As I pointed out in response to commenter John Wittaker here, if the Federal Reserve system was to be dissolved and there existed significant imbalances between districts, final settlement might not be guaranteed. That's because a district Fed's credit is only as good as the credit of its member private banks. If these member were asked to re-capitalize the district bank to enable it to achieve settlement, but they were unable to do so, it would cause problems.

So in that respect, Bijlsma and Lukkezen  are wrong to say that a loss in Richmond and a gain in New York is ultimately irrelevant. When all the chips are down, these imbalances represent transfers between shareholders of district Reserve banks. For instance, if the Richmond Fed failed to settle and its shareholders, including Bank of America, could not support a recapitalization of that district, then the New York Fed would have a massive loss on its hands. This would require member banks like JP Morgan to re-capitalize it. Thus, in comparing the ECB settlement mechanism to the Federal Reserve mechanism, it's not fair to say transfers do not occur - all that can be said is that these transfers are distributed across a different spectrum of actors.

Bijlsma and Lukkezen also have a similiar article here though they don't attribute to the Money View credit for the initial observation nor myself for the underlying research. They note:

Every year in April the average ISA balance over the past 12 months is calculated and netted via transfer of gold certificates between reserve banks.

This also is not entirely correct. Settlement via SOMA transfers, not gold certificates, has been the standard operating procedure since the 1970s.

Perry Mehrling wrote an interesting post called Why did the ECB LTROs help?

He visits the comparison of the Federal Reserve Interdistrict Settlement Account and the ECB Target2 settlement mechanism. I have also found this comparison in a number of other publications, see the list at bottom. Here is the comment I left at the Money View blog.

My reading of the Euro-system rules is that deficit national central banks (NCBs) never have to settle with surplus NCBs. These intra-system balances can grow ad infinitum. Thus, deficit NCBs don't have to worry about owning acceptable assets for settlement, since there is no ultimate day of reckoning. The result is that survival constraints for Eurosystem NCBs are far looser than the survival constraints faced by regional Federal Reserve banks, which must settle each year. In the old days this settlement was conducted by transfers of gold certificates amongst regional Federal Reserve banks. After 1975 the settlement medium was switched to securities held in SOMA. But in the case of the Eurosystem, there is no ultimate settlement mechanism or medium that I am aware of, neither gold nor securities. 

Merhling's co-blogger Daniel Neilson had an interesting reply in which he pointed out that it would appear that the Fed's April settlement seems to no longer be occurring:

Indeed the Federal Reserve System seems to have decided to let FRBNY accumulate a large claim on the other Reserve Banks. One can see why the various Reserve Banks might not feel the need to imagine a breakup of the United States in deciding on the makeup of their balance sheets.

The appearance of non-settlement is noticeable in Mehrling's chart. The reversion to mean that should be occurring each April settlement did not happen in 2011. Debts to the New York Fed from other regional Federal Reserve banks are, seemingly, being allowed to accumulate.

Whether in fact settlement rules are being ignored is a mystery to me. Here is my comment:

Odd that this is not mentioned in the Fed's financial notes. What is the resolution of the data in that chart? End of week? It might not give sufficient granularity for us to assess whether claims were allowed to accumulate, or were settled for a day or two before returning to trend.

Buiter explains why the constraint can be escaped:

"The Interdistrict Settlement Account must be settled once a year with gold-backed securities or Federal treasury bills. This would represent a constraint on inter-district credit flows only if the stock of Federal Treasury bills allocated to the individual Federal Reserve banks was exogenous. However, individual regional reserve banks can always buy Federal treasury bills from banks or other holders of the stuff in their own districts, financing this with an increase in base money. The Federal Reserve Board could then decide to undo this transaction or ‘sterilise’, it. However, an interest-rate-setting Fed will only undo this, if the regional Fed’s Treasury bill purchase and the associated increase in base money were to lead to an excessive divergence between the actual Federal Funds rate and the Federal Funds target. This is highly unlikely. Even when the Fed’s official policy rate is at the effective lower bound for the official policy rate and the Fed is engaged in QE, there is no effective constraint on the ability of regional Reserve Banks to settle the Interdistrict Settlement Account imbalances with Treasury Bills funded with base money issuance. The yearly settlement requirement in the Interdistrict Settlement Account procedure would thus not appear to be a constraint on persistent credit imbalances between individual Federal Reserve banks’ districts."

I am hoping to investigate this mystery a bit further.

There are a number of conflicting resources explaining how the interdistrict account is settled, and how binding this is.

1. The key source is pg 136 - 138 of the Financial Account Manual for the Federal Reserve.
2. The Buiter quote I mention above comes from a Citi report called Original Sinn.
3. Peter Garber's Deutsche Bank article The Mechanics of Intra Euro Capital Flight also touches on the comparison.
4. Citi prints Hans-Werner Sinn reply to Buiter here, giving his views on interdistrict settlement.
5. Here is Sinn's initial paper.
6. I got the reference to the 1975 settlement changes from Meltzer, A History of the Fed, Vol 1. "The diminished stock of gold and gold certificates and rising levels of reserves and deposits required a change in interbank settlement... In 1975 the operations staff recommended that monthly gold transfers cease. Reserve banks other than New York would change once a year. New York would pay for withdrawals and receive deposits from the Treasury. Once a year, the Interdistrict Settlement Fund would reallocate securities in the System Open Market Account to balance accounts. Gold remain as collateral for the note issue, but securities would be the principal collateral (memo, Maurice McWhirter and Alan Holmes to FOMC, Board Records, April 11, 1975). Step by step, gold lost its monetary role and main provisions of the 1913 Federal Reserve Act disappeared."

There are no other good sources that I've been able to locate on the Target2/interdistrict comparison.

Note: I have blogged more extensively on the Interdistrict account here.