If I owe the bank £100 it's my problem. If I owe the bank 700bn euros it's the banks problem. To call the Target2 money owed an 'asset' presumes you be repayed but that is precisely the problem; the southern europeans are having trouble supporting their own economies without Target2 payments. It is therefore an 'exposure'.

So what happens if the southerners leave the euro? They revert back to their own currencies and devalue. Yes Germany might recover the Target2 exposure but if it is still denominated in euros it would take centuries to repay in new Liras and Pesatas etc. It's certainly not going to be payed back as it is supposed to be now and as the new sovereigns would not be run by the ECB but by their own national banks.

700bn euros missing from German banks... As I said it's the banks problem.