Tag Archives: TLTRO II

Macroview Credit flows to households and corporations slackened in August, so domestic demand may be less of a factor in near-term growth. But we are sticking to our full-year growth forecast for the euro area. Credit to euro area households increased in August. Although at a slower pace than the previous month, August was the 23th straight month of positive credit flows. By contrast, bank credit to euro area non-financial corporations (NFCs) declined by EUR1 bn in August (adjusted for sales...

We think some of the ECB’s critics are missing the point. In particular, we expect TLTRO II to lower bank funding costs, mitigate the adverse consequences of low (negative) rates on bank margins, strengthen the ECB’s forward guidance and improve the transmission of monetary policy. We expect the take-up at all four TLTRO II operations to exceed EUR500bn, of which roughly EUR400bn should be rolled over from TLTRO I. The resulting reduction in terms of the cost of negative rates could be...