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.

Background

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.

TLTRO III

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 during the rest of the life of the respective TLTRO III.

• Consolidated version of Decision ECB/2019/21
• Decision ECB/2021/21 of the European Central Bank of 30 April amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations introduces changes in the sanction regime and provides further details on the treatment of corporate reorganisations
• Version of Decision ECB/2019/21 showing the amendments introduced by amending Decision ECB/2021/3
• Decision ECB/2021/3 of 29 January 2021 amending Decision ECB/2019/21 introduces changes in the borrowing allowance, a new lending assessment period and changes in the interest rate to be applied to TLTRO III.
• Decision ECB/2020/25 of 30 April 2020 amending Decision ECB/2019/21 introduces changes in the lending performance threshold, a new lending assessment period and changes in the interest rate to be applied to TLTRO III.
• Decision ECB/2020/13 of 16 March 2020 amending Decision ECB/2019/21 introduces changes in the borrowing allowance and the bid limits per operation to be applied to TLTRO III and allows an earlier repayment option after one year of settlement starting in September 2021.
• Decision ECB/2019/28 of 12 September 2019 amending Decision ECB/2019/21 introduces changes in the interest rate to be applied to TLTRO III and extends the maturity to three years with repayment option after two years.
• Decision ECB/2019/21 of 22 July 2019 on a third series of targeted longer-term refinancing operations defines the conditions for participation in TLTRO III and other operational aspects.

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
• FAQs on TLTRO III operations

TLTRO II

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.

• Decision ECB/2019/22 of 22 July 2019 amending Decision ECB/2016/10 introduces a change to the notification period for voluntary early repayments of amounts borrowed under TLTRO II.
• Decision ECB/2016/30 of 31 October 2016 amending Decision ECB/2016/10 addresses an inconsistency in the deadline for lead institutions to apply for changes to TLTRO-II group composition.
• Decision ECB/2016/10 of 28 April 2016 on a second series of targeted longer-term refinancing operations defines the conditions for participation in TLTRO II and other operational aspects, published on 3 May 2016.
• ECB announces new series of targeted longer-term refinancing operations (TLTRO II), 10 March 2016

Calendars

• Indicative calendar for TLTRO II
• Indicative calendar for TLTRO-II voluntary early repayments as of June 2019, published 2 October 2019

Reporting template

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.

TLTRO I

• Decision ECB/2016/11 amending Decision ECB/2014/34 on measures relating to targeted longer-term refinancing operations (TLTROs) introducing an additional early repayment option for TLTROs in June 2016.
• Decision ECB/2015/5 of 10 February 2015 amending Decision ECB/2014/34 on measures relating to targeted longer-term refinancing operations
• Decision ECB/2014/34 of 29 July 2014 on measures relating to targeted longer-term refinancing operations
• Updated modalities of the targeted longer-term refinancing operations (as of 29 July 2014)(Chapter 6 "Dates and deadlines" is now superseded by the revised calendar for 2014, of 3 May 2016 below.)

Calendars

• Revised calendar for 2016, published 3 May 2016
• Revised calendar for 2015, published 3 May 2016
• Revised calendar for 2014, published 3 May 2016
• Revised table on indicative voluntary repayment settlement dates of TLTROs, published 3 May 2016

Reporting template

• Updated guidelines for completing the TLTRO reporting template (as of 10 February 2015)
• TLTRO reporting template
• TLTRO reporting template - example