Since no money system could tolerate such a sustained attack for long, the outflows are compensated for by "target 2" inflows from the European Central Bank, which in turn borrows the money from the eurozone's creditor central banks, in particular the Bundesbank. The process thereby becomes something of a money go round. The foreign investor withdraws his money from the Spanish or Italian bank and deposits it with an apparently "safer" German bank, which in turn lends the money to the Bundesbank, from where it finds its way back through the ECB via the target 2 system to the original Spanish or Italian bank. It ... (full story)