FRANKFURT (Reuters) - Euro zone banks will repay 16.740 billion euros ($17.98 billion)worth of ultra-cheap loans, the European Central Bank said on Friday, in time to roll the funds into the last instalment of it’s Targeted Long-Term Refinancing Operation next week.
Introduced last year as lending struggled to take off, the ECB’s second TLTRO was designed to give banks long-term access to cheap cash with the ECB even offering rebates if banks met their lending commitments.
But with bank lending to euro zone households growing at its fastest pace in nearly six years, the ECB last month decided not to extend the TLTRO program after its last auction next week.
ECB President Mario Draghi has said that the fact that there was no discussion about a new TLTRO in the ECB’s Governing Council at its last meeting on March 9 was a sign of improved financial conditions and stronger lending in the euro zone.
The first TLTRO program was launched in 2014 aiming to give banks a reward to boost lending and passing the ECB money through to the real economy.
Reporting by Andreas Framke, editing by Pritha Sarkar