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Impact of TLTRO III on bank lending: The Slovak experience

Author

Listed:
  • Marcel Barmeier
  • Juraj Falath

    (National Bank of Slovakia)

  • Alena Kissova

    (National Bank of Slovakia)

  • Adriana Lojschova

    (National Bank of Slovakia)

Abstract
We investigate the impact of TLTRO III operations introduced by the European Central Bank on bank lending, interest rates and profitability of Slovak banks. We deploy a two-step estimation approach with a mahalanobis distance matching and a difference-in-difference approach relying on bank-level and AnaCredit data. Our findings suggest that the credit easing measures had a positive effect on bank lending and negative effect on lending rates for non-financial corporations. With respect to bank profitability, we find inconclusive evidence of a positive effect of TLTRO III on net interest income and return on assets. Banks in Slovakia have not significantly increased their reserves at the central bank in reaction to participation in TLTRO III.

Suggested Citation

  • Marcel Barmeier & Juraj Falath & Alena Kissova & Adriana Lojschova, 2023. "Impact of TLTRO III on bank lending: The Slovak experience," Working and Discussion Papers WP 2/2023, Research Department, National Bank of Slovakia.
    • Handle: RePEc:svk:wpaper:1093
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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