New Reserve Bank of Australia research found no evidence that its AUD188 billion Term Funding Facility helped increase credit supply to businesses during the pandemic.

The research discussion paper released Tuesday showed no statistically significant effects of the TFF on bank credit growth for small and medium-sized businesses compared to large businesses, and mixed results when comparing aggregate business growth for TFF-eligible banks against ineligible non-banks. There was no statistically significant effect on aggregate business credit growth for eligible banks that accessed the TFF compared to banks that did not draw down.

However, the RBA said the TFF provided an assured source of funding at a time of considerable stress in the financial system and helped lower banks' funding costs, and any effects on business lending may not be reflected in their results.