None of the two types of banks had a capacity or an incentive to provide credit to the economy on affordable conditions. The new operation put all banks on the same funding footing and thus created the conditions for the banking industry as a whole to start competing again for good credit.
As a result of TLTROs and, in due time, the other instruments that were added, bank lending rates for both firms and households have dropped by more than 110 basis points since 2014 and are now at historical lows. Encouragingly, the improvement in credit conditions is occurring both 3/4  BIS central bankers' speeches  within and across euro area countries.