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 as low as the average interest rate on the deposit facility calculated over the life of the respective TLTRO III during the rest of the life of the same operation.
Calendar, templates and FAQ
- Indicative calendar for TLTRO-III voluntary early repayments as of July 2021
- 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 02/08/2022 including new dates for TLTRO III voluntary early repayments in 2023 and 2024)
- 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.