This work evaluates the impact of the second series of Targeted Longer-Term Refinancing Operations (TLTRO2) on credit market conditions for Italian firms. The estimates use a difference-in-differences approach on quarterly data, including term loans, interest rates, and bank and firm characteristics, between the start of 2015 and the end of 2017.
The TLTRO2 had a positive impact on credit, encouraging lending to firms and reducing interest rates. The impact on the amount of credit was stronger for less risky firms, while that on interest rates was stronger for riskier ones. Smaller firms benefited more in terms of both loan amounts and interest rates.