The effect of TLTRO-II on bank lending

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Title: The effect of TLTRO-II on bank lending
ISBN: 978-952-323-269-3
Author: Laine, Olli-Matti
Organization: Bank of Finland
Series: Bank of Finland Research Discussion Papers
ISSN: 1456-6184
Series year: 2019
Series number: 7/2019
Year of publication: 2019
Publication date: 8.4.2019
Pages: 32
Subject (yso): rahapolitiikka; euroalue; rahoitus; pankit; luotonanto; luotot; vaikutukset
Keywords: TLTRO-II
JEL: E44; E51; E52; G21
Other keywords: TLTRO; unconventional monetary policy; credit supply; euro area
Abstract: This study applies a difference-in-differences approach to estimate the effect of the European Central Bank’s second series of targeted longer-term refinancing operations (TLTRO-II) on bank lending. Effects on corporate loans, loans for house purchase and loans for consumption are analysed separately. The results indicate that TLTRO-II increased lending to non-financial corporations. The cumulative effect of TLTRO-II on participating banks’ corporate lending is estimated to be about 30 per cent. The estimated effects for house purchase and consumption loans are positive, but statistically insignificant.

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