To the extent this compression of secondary market spreads is passed-through, this would support loan origination and promote credit flows at lower lending rates. As indicated, this market response has materialised although the lion’s share of the liquidity injection of the measures is yet to come. In September, we conducted only the first out of eight TLTROs.
Notably in December, counterparties will have another opportunity to participate in the TLTROs drawing on their initial allowance of 7% of their outstanding stock of loans to the non-financial private sector, excluding loans to households for house purchase. As of next year, there will be additional quarterly allotments, in which counterparties will be able to receive additional funding determined by their recent lending performance.