We need the assurance that the practices that have kept an institution sound so far are likely to keep it sound in the foreseeable future. US bank managers had earlier come to the same conclusion regarding their own abilities to control individual transactions and positions in their worldwide operations.
Our estimates show that TLTRO III liquidity can be expected to boost loan volumes considerably, to the tune of 3 percentage points cumulatively by 2022. In addition, the euro area bank lending survey indicates that TLTRO funding has been effective in easing the terms and conditions that banks apply in their lending.