Instead, it can reflect changes in foreign demand for that country's financial assets, or changes in domestic demand for foreign financial assets. For example, during the past two years, investors have become more concerned about the large and growing U.S. current account deficit which, according to the Bureau of Economic Analysis, hit a remarkable $ billion, or 5.6% of GDP, in 2004.
The extended maturity of TLTRO III will be better aligned with bank-based financing of investment projects, thereby further supporting banks’ financing to the real economy. Finally, in view of the lengthened maturity, the option to voluntarily repay the amounts borrowed before maturity at a quarterly frequency will provide greater flexibility for banks’ funding plans.