European shares closed lower Thursday after the European Central Bank cut its forecast for growth in the euro zone.
The central bank also announced it was to start a fresh set of loans to banks. The TLTRO program, which will be launched in September this year and end in March 2021, is seen as a bid by the central bank to prop up Europe's flagging economy.
European banking stocks shed 2 percent by the end of the session, despite hitting a session high straight after the announcement. Meanwhile the euro dipped 0.7 percent against the U.S. dollar.
TLTRO III (Targeted Longer-Term Refinancing Operations) is the third injection of stimulus from the ECB. If commercial banks lend the ECB money on to the real economy, they receive cash back rather than pay interest on the loan.