Decision (EU) 2021/752 of the European Central Bank of 30 April 2021 amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations (ECB/2021/21)

• Published date: 07 May 2021
• Official Gazette Publication: Official Journal of the European Union, L 161, 7 May 2021

7.5.2021 EN Official Journal of the European Union L 161/1

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DECISION (EU) 2021/752 OF THE EUROPEAN CENTRAL BANK

of 30 April 2021

amending Decision (EU) 2019/1311 on a third series of targeted longer-term refinancing operations (ECB/2021/21)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first indent of Article 127(2) thereof,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular the first indent of Article 3.1, Article 12.1, the second indent of Article 18.1 and the second indent of Article 34.1 thereof,

Having regard to Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (General Documentation Guideline) (ECB/2014/60) (1),

Whereas:

(1) Pursuant to Article 1(4) of Guideline (EU) 2015/510 (ECB/2014/60), the Governing Council may, at any time, change the tools, instruments, requirements, criteria and procedures for the implementation of Eurosystem monetary policy operations.

(2) On 22 July 2019, in pursuing its price stability mandate and to preserve favourable bank lending conditions and support the accommodative stance of monetary policy in Member States whose currency is the euro, the Governing Council adopted Decision (EU) 2019/1311 of the European Central Bank (ECB/2019/21) (2). This Decision provides for a third series of targeted longer-term refinancing operations (TLTROs-III) to be conducted over the period September 2019 to March 2021.

(3) On 12 March 2020, in order to support bank lending to those most affected by the spread of the coronavirus disease (COVID-19), in particular small and medium-sized enterprises, the Governing Council decided to change certain key parameters of TLTROs-III. Moreover, on 30 April 2020, in order to further support the provision of credit to households and firms in the face of the prevalent economic disruptions and heightened uncertainty, the Governing Council decided on certain further changes to these parameters. Decision (EU) 2020/407 of the European Central Bank (ECB/2020/13) (3) and Decision (EU) 2020/614 of the European Central Bank (ECB/2020/25) (4) implement these changes.

(4) On 10 December 2020, the Governing Council decided to adopt additional monetary policy measures aiming to contribute to preserving favourable financing conditions over the pandemic period, thereby supporting the flow of credit to all sectors of the economy, underpinning economic activity and safeguarding medium-term price stability. As part of these measures, the Governing Council decided to further recalibrate the conditions of TLTROs-III. In particular, it decided to extend the period over which considerably more favourable terms will apply to June 2022, that three additional operations will be conducted between June and December 2021, and to raise the total amount that Eurosystem counterparties will be entitled to borrow in TLTROs-III from 50% to 55% of their stock of eligible loans. In order to provide an incentive for banks to sustain the current level of bank lending, the Governing Council also decided that the extension of the more favourable terms on TLTROs-III to June 2022 will be made available only to banks that achieve a new lending performance target. Decision (EU) 2021/124 of the European Central Bank (ECB/2021/3) implemented these changes (5).

(5) The sanctions related to non-compliance with the deadlines set for submitting reports and auditor evaluations should be adjusted to make the sanctioning regime more proportionate while still aiming to ensure that participants comply with the deadlines set. In addition, the cases in which participants are permitted to switch from individual to group participation or join existing TLTRO-III groups as well as the procedure to be followed in such cases should be clarified. Furthermore, provision should be made for an exemption from the obligation to submit a further auditor’s evaluation in relation to reports revised due to corporate reorganisations or changes in the composition of TLTRO-III groups. Lastly, the reporting requirements and relevant interest rate calculations in the event of a change in the TLTRO-III group composition or of a corporate reorganisation that occurs between 1 April 2021 and 31 December 2021 should be clarified.

(6) The changes to the sanctions for non-compliance with reporting and auditing requirements and the provisions regarding the treatment of corporate reorganisations occurring after 31 March 2021 for the purpose of calculating TLTRO-III interest rates introduced by this Decision should be made known to credit institutions as soon as possible. Therefore, this Decision should enter into force without delay.

(7) Therefore, Decision (EU) 2019/1311 (ECB/2019/21) should be amended accordingly,

HAS ADOPTED THIS DECISION:

Article 1

Amendments

Decision (EU) 2019/1311 (ECB/2019/21) is amended as follows:

(1) in Article 1, point 17 is replaced by the following: ‘(17) “participant” means a counterparty eligible for Eurosystem monetary policy open market operations in accordance with Guideline (EU) 2015/510 (ECB/2014/60), which submits bids in TLTRO-III tender procedures either on an individual basis or on a group basis as lead institution, and which is subject to all rights and obligations associated with its participation in the TLTRO-III tender procedures, excluding a credit institution which has fully repaid all TLTRO-III borrowings;’;

(2) in Article 3(2), point (d) is replaced by the following: ‘(d) the composition and the lead institution of a TLTRO-III group shall remain unchanged for all TLTROs-III, subject to paragraphs 5, 5a, 6 and 6a of this Article.’;

(3) in Article 3, paragraph (5a) is replaced by the following: ‘5a. In exceptional cases, where there are objective reasons, the Governing Council may decide to allow institutions participating in TLTROs-III on an individual basis to instead participate in future TLTROs-III on a group basis by joining an existing TLTRO-III group or by forming a new TLTRO-III group. That TLTRO-III group and each of its members shall comply with the provisions of Article 3.’;

(4) in Article 3(6), the introductory phrase in point (b) is replaced by the following: ‘If, in relation to the TLTRO-III group, a credit institution that is not a participant or a member of a TLTRO-III group fulfils the conditions set out in Article 3(3)(a)(i) or (ii) with effect after, but not on or before, the last day of the month preceding the application referred to in point (d) of paragraph 3, the TLTRO-III group composition may change to reflect the addition of that credit institution as a new member, provided that:’;

(5) in Article 3, the following paragraph 6a is inserted: ‘6a. Without prejudice to paragraph 5a, an institution participating in TLTROs-III on an individual basis may instead participate in future TLTROs-III on a group basis by forming a TLTRO-III group, provided that: (a) the members of that TLTRO-III group are credit institutions that are not participating in TLTROs-III on an individual basis or as members of another TLTRO-III group and fulfil the conditions set out in Article 3(3)(a)(i) or Article 3(3)(a)(ii) with effect after, but not on or before, the last day of the month preceding the application referred to in Article 3(3)(d); and (b) that TLTRO-III group and each of its members comply with the provisions of Article 3.’;

(6) in Article 3(7), the introductory phrase is replaced by the following: ‘Where changes in the composition of a TLTRO-III group have been accepted by the Governing Council in accordance with paragraph 5, a new TLTRO-III group has been formed in accordance with paragraph 5a or paragraph 6a, or changes in the composition of TLTRO-III groups have taken place in accordance with paragraph 6, unless otherwise decided by the Governing Council, the following shall apply:’;

(7) the second subparagraph of Article 5(6) is replaced by the following: ‘If due to the exercise of remedies available to an NCB in accordance with its contractual or regulatory arrangements, a participant is required to repay the TLTRO-III outstanding amounts in the eighth or subsequent TLTROs-III before the resulting interest rate for the additional special reference period has been communicated to the participant, the

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