Targeted longer-term refinancing operations (TLTROs)
The targeted longer-term refinancing operations (TLTROs) are Eurosystem operations that provide financing to credit institutions. By offering banks long-term funding at attractive conditions they preserve favourable borrowing conditions for banks and stimulate bank lending to the real economy.
The TLTROs, therefore, reinforce the ECB’s current accommodative monetary policy stance and strengthen the transmission of monetary policy by further incentivising bank lending to the real economy.
When were they launched?
A first series of TLTROs was announced on 5 June 2014, a second series (TLTRO II) on 10 March 2016 and a third series (TLTRO III) on 7 March 2019.
How do they work?
The TLTROs are targeted operations, as the amount that banks can borrow is linked to their loans to non-financial corporations and households.
In TLTRO III, similarly to TLTRO II, the interest rate to be applied is linked to the participating banks’ lending patterns. The more loans participating banks issue to non-financial corporations and households (except loans to households for house purchases), the more attractive the interest rate on their TLTRO III borrowings becomes.
The third TLTRO programme consists of a series of ten targeted longer-term refinancing operations, each with a maturity of three years, starting in September 2019 at a quarterly frequency. Borrowing rates in these operations can be as low as 50 basis points below the average interest rate on the deposit facility over the period from 24 June 2020 to 23 June 2022, and, if applicable, as low as the average interest rate on the deposit facility during the rest of the life of the same operation, as further explained in the FAQs on TLTRO III operations.
Calendar, templates and FAQ
- Revised indicative calendar for TLTRO III voluntary repayments, published 27 October 2022
- Revised indicative calendar for TLTRO III, published 5 May 2021
- Template for reporting participation in TLTRO III operations
- Template for calculating the TLTRO III interest rates applicable to repayments at maturity or voluntary repayment (updated on 27/10/2022)
- FAQs on TLTRO III operations
The second TLTRO programme consists of a series of four targeted longer-term refinancing operations, each with a maturity of four years, starting in June 2016 at a quarterly frequency. Borrowing rates in these operations can be as low as the interest rate on the deposit facility.
Given that the methodological basis for TLTRO II remains unchanged from the first TLTRO series, the TLTRO reporting template and the example are also applicable for TLTRO II purposes.