Targeted longer-term refinancing operations III

At their 7 March 2019 meeting, the Governing Council of the ECB announced the launch of a new series of targeted longer-term refinancing operations (TLTRO‑III), starting in September 2019 and ending in March 2021, each with a maturity of two years. Like the outstanding TLTRO programme, TLTRO-III will feature built-in incentives for credit conditions to remain favourable. 

On 6 June the Governing Council decided further operational details on the new forthcoming series of GLRGs. Counterparties are entitled to borrow up to a total of 30% of the stock of eligible loans as at 28 February 2019. The amount counterparties can borrow under TLTRO III is reduced by any amount that they previously borrowed under TLTRO II that is still outstanding. In addition, the amount that counterparties can borrow in each of the seven operations will be limited to, at most, 10% of their stock of eligible loans as at 28 February 2019. TLTRO III operations cannot be repaid before maturity.

The interest rate for each operation will be set at a level of 10 basis points above the average rate applied to the Eurosystem’s main refinancing operations (MROs) over the life of the respective TLTRO. For counterparties whose eligible net lending between the end of March 2019 and the end of March 2021 exceeds their benchmark net lending, the rate applied to TLTRO III operations will be lower, and can be as low as the average interest rate on the deposit facility prevailing over the life of the respective operation plus 10 basis points.

Further details on the precise terms of TLTRO-III will be communicated in due course.