Some ECB Officials See Legal Basis to Toughen TLTRO Terms
- 10% inflation, rates rising may provide reason to intervene
- Adjusting loan conditions outright is one of three options
A pedestrian bridge across the Main with the European Central Bank beyond.
Photographer: Dorothee Barth/picture alliance/Getty Images
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Some European Central Bank policymakers reckon it’s legally feasible to revise long-term lending conditions for banks after the terms became more generous because of changes in the economy, according to officials familiar with the matter.
The so-called TLTRO loans were first issued in 2014 to encourage banks to lend as Europe’s debt crisis weighed on growth and threatened to trigger a bout of deflation. They served a similar purpose after the pandemic struck.