(2/2) potentially be targeted even further to...>

ECB: (2/2) potentially be targeted even further to allow liquidity to be

provided to business or workers most impacted? The big question here is how

would this help as take-up of TLTRO III operations have been low so far, so

there may need to be some additional incentives in order to encourage take-up.

It may also be that the ECB can be the liquidity provider, but there needs to be

encouragement from national governments and banking regulators for banks to

provide payment holidays etc. to those most affected. The additional liquidity

could help provide the funding for the payment holidays but the encouragement of

payment holidays almost needs to come before banks choose how much of the TLTRO

they take-up.

- The deadline for bids in the next TLTRO III operation is 18 March. National

central banks need to inform banks about bid limits on 16 March and the next ECB

meeting is 12 March. This leaves a very tight timeline for governments, banking

regulators and the ECB to act, unless additional off-cycle TLTROs are announced.

We note that this is also something that cannot be ruled out, and indeed in our

view may be even more likely than action to alter the next scheduled operation.