On the one side, as reported in the October 2021 bank lending survey, the ECB’s asset purchases (and, even more so, the negative deposit facility rate) were assessed by many banks as exerting a negative impact on their profitability through a negative impact on their net interest income, while capital gains had a positive net impact.
On the other side, a high percentage of banks reported that the ECB’s two-tier system for remunerating excess liquidity holdings supported bank profitability, mainly related to a positive impact on net interest income, offsetting some of the pressure associated with the excess liquidity generated by asset purchases.