The sharp reduction in bank lending rates has been accompanied by easier access to funding, as recent surveys have shown1 These positive developments have been supported by the second series of targeted longer-term refinancing operations, as a result of which banks are passing on the favourable funding conditions to their customers.
Moreover, these improvements are not limited to interest rates: bank lending volumes have also been gradually recovering since early 2014. Market-based funding conditions, too, have improved significantly in response to the corporate sector purchase programme launched in June 2016. Looking forward, we are confident that the ongoing economic expansion will continue to firm and broaden.