TLTRO Early Repayments Seen As High As E1.5T (2/3)

The other factor is the size of TLTRO takeup, which we noted yesterday (TLTRO Repayments Coming Friday, But How Much?).

• Institutions have until the end of the business day today to tell their national central banks about their repayment intentions, the amounts of which will be announced Friday.
• The expectation for this Friday's early repayment is not entirely clear-cut, though the central forecast appears to be around E600bln.
• Some institutions see repayments as being fairly modest; the high estimate is E1-1.5T. This compares w a total of E2.1trn of TLTROs outstanding.
• Additionally opinions vary on whether the bulk of that is expected to be repaid this month, or in December / January.

Some views on early repayment amounts and potential market impact, in alphabetical order of institution:

• Barclays: Based on largest European banks' communications in the Q3 earnings season, forecasting E600bln early repayments, possibly as early as Nov, but estimates are highly uncertain both in terms of repayment and timing (Nov vs Dec vs Jan).
• BBVA: The changes to TLTRO conditions are "unlikely to trigger a massive, generalised flow of early repayment in the first windows available".
• BofA: Banks to repay between E1trn and E1.5trn in the upcoming window.