The very different lending flows between firms and households in March reflect the nature of the policy approaches to supporting these two sectors. In the case of firms, policy support has been mainly channelled via the banking sector, largely in the form of government-guaranteed credit and central bank measures to support credit. By contrast, direct fiscal support in the form of automatic stabilisers such as unemployment benefits or short-time working schemes, rather than bank credit, has constituted the backbone of the policy actions aimed at supporting the household sector. Chart 14 Bank loans  https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200519~e5203d3520.en.html  10/14  5/19/2020  Pandemic central banking: the monetary stance, market stabilisation and liquidity  (annual percentage changes)  Source: ECB. Notes: Monthly data. Adjusted loans (i.e. adjusted for sales, securitisation and cash pooling activities). The latest observations are for March 2020. While credit volumes are holding up in the aggregate, there are also some strains. According to the survey on access to finance of enterprises (conducted between 2 March and 8 April), small and medium-sized enterprises (SMEs) reported – in net terms – a decline in the expected availability of bank loans across countries and sectors (Chart 15). Chart 15 Change in the actual and expected availability of bank loans for SMEs across countries (net percentages of respondents, over the past and next six months)  Source: ECB and European Commission survey on the access to finance of enterprises (SAFE).

Looking at the short to medium end of the risk-free curve in more detail, our measures (including the pandemic emergency purchase programme, or PEPP) have contributed to a lowering of the medium and long segments of the yield curve compared to the pre-crisis path (Chart 7). Chart 7 EONIA forward curve estimated from overnight index swaps  https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200519~e5203d3520.en.html  5/14  5/19/2020  Pandemic central banking: the monetary stance, market stabilisation and liquidity  (percentages per annum)  Sources: Bloomberg, Refinitiv and ECB calculations. Note: The latest observations are for 14 May 2020 (for realised EONIA). At the long end of the curve, the combined effect of our asset purchase programmes – comprising the asset purchase programme (APP) and the PEPP – is estimated to compress the term premium significantly by around 80 basis points at the ten-year tenor. Looking just at the decisions we have taken since March, the additional € billion APP purchase envelope for 2020 and the PEPP contribute to a further easing of ten-year rates by lowering the term premium by more than 10 basis points. The total effect of these decisions on longer-term interest rates is likely to be even more substantial, given that the PEPP not only works through the well-known channels of duration extraction and portfolio rebalancing, but also addresses risks to transmission in the euro area. To the extent that this lowers risk premia, interest rates in the euro area have declined even more strongly as a result of our decisions compared with plausible counterfactual scenarios.