Editing European Central Bank (section)

==== Long Term Refinancing Operations (LTRO) ====
The long term refinancing operations (LTRO) are regular open market operations providing financing to credit institutions for periods up to four years. They aim at favoring lending conditions to the private sector and more generally stimulating bank lending to the real economy,<ref>{{Cite web |last= |first= |date=2023-11-29 |title=Open market operations |url=https://www.ecb.europa.eu/mopo/implement/omo/html/index.en.html |access-date=2023-12-05 |website=European Central Bank - Eurosystem |language=en}}</ref> thereby fostering growth.

In December 2011 and January 2012, in the aftermath of the [[2008 financial crisis]], the ECB implemented two LTROs, injecting over €1000 billion of liquidity in the Eurozone financial system. They were later criticized for their inability to revive growth and to help truly revive the real economy, despite having stabilized the Eurozone's financial institutions.<ref name="Fontan-2018">{{Cite journal |last=Fontan |first=Clement |date=2018-10-12 |title=Frankfurt's double standard: the politics of the European Central Bank during the Eurozone crisis |url=https://www.tandfonline.com/doi/full/10.1080/09557571.2018.1495692 |journal=Cambridge Review of International Affairs |volume=31 |issue=2 |pages=175 |doi=10.1080/09557571.2018.1495692 |via=Taylor & Francis Online}}</ref> Further, these operations were devoid of monitoring from the ECB regarding the use made of these liquidities<ref name="Fontan-2018" /> and it appeared that banks had significantly used these funds to pursue carry-trade strategies,<ref>{{Cite journal |last1=Acharya |first1=Viral |last2=Steffen |first2=Sascha |date=6 June 2014 |title=The "greatest" carry trade ever? Understanding eurozone bank risks |url= |journal=Journal of Financial Economics |pages=215–236 |doi=10.1016/j.jfineco.2014.11.004 }}</ref> purchasing sovereign bonds with higher rates and corresponding maturity to generate profits, instead of increasing private lending.<ref name="Fontan-2018" /><ref name="Dwyer-2023">{{Cite journal |last1=Dwyer |first1=Gerald P. |last2=Gilevska |first2=Biljana |last3=Nieto |first3=Maria J. |last4=Samartín |first4=Margarita |date=2023-07-01 |title=The effects of the ECB's unconventional monetary policies from 2011 to 2018 on banking assets |journal=Journal of International and Financial Markets, Institutions & Money |volume=87 |issue=87 |pages=4 |doi=10.1016/j.intfin.2023.101800 |doi-access=free }}</ref>

These critics and deficiencies brought the ECB to instigate targeted long term refinancing operations (TLTROs), first in September and later in December 2014.<ref>ECB press release, 18 September 2014.</ref> These complementary programs imposed conditionality on the LTROs.<ref name="Fontan-2018" /> The TLTROs provided low cost financing to participating banks, under the condition that they reached certain targets in terms of lending to firms and households.<ref name="Dwyer-2023" /> The participating banks were thus more incited to lend to the real economy.

A third wave of TLTRO's was announced on 7 March 2019, namely the TLTRO III.<ref>{{Cite web |date=2019-03-07 |title=Monetary Policy Decisions |url=https://www.ecb.europa.eu/press/pr/date/2019/html/ecb.mp190307~7d8a9d2665.en.html |access-date=2023-12-10 |website=European Central Bank - Eurosystem}}</ref> Under TLTRO III, the interest rate was set at -0.5% below the deposit facility rate (DFR), under condition that banks reached a specific lending performance threshold. The TLTRO III programme was successful to stimulate credit growth.<ref name="Barmeier-2023">{{Cite journal |last1=Barmeier |first1=Marcel |last2=Falath |first2=Juraj |last3=Kiššová |first3=Alena |last4=Lojschová |first4=Adriana |date=2023 |title=Impact of TLTRO III on bank lending: The Slovak experience |url=https://nbs.sk/dokument/b6528586-2679-4245-a850-cca84c5a9ca6/stiahnut/?force=false |journal=National Bank of Slovakia Working Papers |issue=2/2023 |pages=4 |via=National Bank of Slovakia}}</ref><ref>{{Cite journal |last1=Silva |first1=Emilie Da |last2=Grossmann-Wirth |first2=Vincent |last3=Nguyen |first3=Benoit |last4=Vari |first4=Miklos |date=2021 |title=Paying Banks to Lend? Evidence from the Eurosystem's TLTRO and the Euro Area Credit Registry |url=https://ideas.repec.org//p/bfr/banfra/848.html |journal=Working Papers |language=en}}</ref>