The second channel results in part from the first, and relates to the direct impact on mediumterm inflation expectations that a LSAP programme implies. It is expected that when forming expectations about future inflation, market players factor in the effect of this non-standard policy measure.
Non-standard measures can also stimulate activity through a third channel, specifically by lowering the effective cost and availability of credit to the non-financial private sector. Again, the TLTRO programme does this, providing explicit incentives for banks to extend their credit supply.