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TLTRO III and bank lending conditions

Francesca Barbiero, Miguel Boucinha and Lorenzo Burlon

Economic Bulletin Articles, 2021, vol. 6

Abstract: The third series of targeted longer-term refinancing operations (TLTRO III) enabled one of the largest liquidity injections by the European Central Bank (ECB). This article provides an assessment of the effectiveness of the operations in supporting bank lending conditions. It discusses the main transmission channels of TLTRO III, including in relation to other policy measures. This article also includes a box on the importance of collateral easing measures, a box on the impact of TLTRO III on money market rates, and a box on the consequences of high participation in TLTRO III for excess liquidity levels. The article then documents, based on hard data on banks’ balance sheets and soft information from bank surveys, the extent to which TLTRO III has eased bank lending conditions, thereby helping to support access to credit for households and firms during the coronavirus (COVID-19) crisis. JEL Classification: E51, E52, E58, G01, G21

Keywords: bank lending; COVID-19 crisis; Monetary policy; TLTRO (search for similar items in EconPapers)
Date: 2021-09
Note: 2609469
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