The temporary LTROs announced in mid-March provided banks with funding at the deposit facility rate in order to bridge liquidity needs until the settlement of this month’s TLTRO. These operations provided an effective liquidity backstop, helping to safeguard the smooth functioning of money markets.
The pandemic emergency longer-term refinancing operations (PELTROs) that we launched in April will also act as a liquidity backstop now that the bridge LTROs have come to an end. They also provide an additional source of longer-term funding for banks, which is especially valuable for those banks with business models that focus on lending to sectors not covered by the TLTRO programme.