Bundesbank’s balance sheet is continuing to grow at a fairly rapid pace. The January increase was driven by a rise in TARGET2 claims against other Eurozone central banks - a EUR 34bn claim increase in a single month (the liability side was increased via deposits by banks.) This is represented on Bundesbank’s balance sheet by "Other assets/Liabilities" (see table below):
Deutsche Bundesbank’s claims on and liabilities to central banks of the European Union (i.e. central banks of the Eurosystem and non-Eurosystem central banks) are recorded on a net basis; the net position of the Deutsche Bundesbank vis-à-vis central banks of the European Union is included within the item "Other assets" ("Other liabilities")
Bundesbank Balance Sheet (source: Bundesbank)
With the bulk of the EUR 523bn LTRO-II participants being non-German banks, the TARGET2 imbalances will increase further. Bundesbank’s balance sheet is expected to grow materially, with the bulk of the expansion coming from rising TARGET2 claims - on the asset side. The periphery central banks' balance sheets will grow as well, but with TARGET2 claims on the liability side. On a consolidated basis the ECB will show an increase in long term loans to banks on the asset side and a rise in deposits/reserves on the liability side.