8 We have also tested the effectiveness of our measures using more micro analysis, for instance by gauging how they have affected the behaviour of TLTRO borrowers relative to non-borrowers. This analysis shows that TLTRO borrowers have reduced their recourse to wholesale funding more than for other banks, allowing them to lower their funding costs.
This has in turn raised bank bond prices and, in combination with spillover effects from the APP, helped suppress the cost of financing for banks across euro area countries, benefiting banks regardless of their recourse to Eurosystem’s lending operations. The role of our measures as a driver of these developments is confirmed by banks’ responses to the Bank Lending Survey (BLS).