Teunis Brosens, the Head Economist at ING, notes that net lending to businesses remains weak in Eurozone, but this is largely TLTRO-related, and may improve in the months ahead.

"In July, the eurozone M3 money measure increased by €89bn (seasonally adjusted), which is well above the pre-pandemic monthly average, but nothing special since March last year. The main driver continues to be the European Central Bank's asset purchase programme, as it has been since March 2020. In net terms, governments (indirectly, as the ECB only buys on secondary markets) borrowed €79bn from the Eurosystem in June, leading to the equivalent sum in money creation."

"Turning to bank lending, net bank lending to eurozone households remains strong; in fact June net lending surpassed €25bn, registering the highest monthly increase since September 2007. Low interest rates and returning consumer confidence are contributing to buoyant housing markets and mortgage demand in many eurozone countries."

"This also means that banks need not worry too much about their TLTRO lending benchmarks just yet. The “additional special reference period”, measuring borrowing to businesses and non-mortgage borrowing to households, runs until December (and then determines the TLTRO rate received by banks from June this year until June '22."