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Citing sources familiar with talks, Reuters recently reported that the ECB was unlikely to decide on final TLTRO conditions before June as policymakers would continue to calibrate incoming data until then.

Key quotes

  • ECB committee proposed new TLTRO premium at 25 basis points above main refinancing rate but governors pushed back saying it was too high.
  • Key goal of new TLTRO conditions is to reduce stock of loans to avoid future cliff effect.
  • Best TLTRO rate not seen going below zero though discussion is still ongoing and growth weakness could change terms.
  • ECB did not discuss tiered deposit, only one governor expressed deep concern about negative rates.