In allowing the application for the three-year LTROs, the modification of the collateral requirements can be regarded as having contributed to easing the funding situation of European banks caused by the shortage of eligible collateral.
The structure of the sector might also be affected by the adoption of the European Commission’s proposal that sets limitations for the biggest and most complex banks in risky proprietary trading and the possibility for supervisors to require separation between certain potentially risky trading activities and deposit- taking business in case of threats to financial stability.