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Decision (EU) 2020/614 of the European Central Bank of 30 April 2020 amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2020/25)
Decision (EU) 2020/614 of the European Central Bank of 30 April 2020 amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2020/25)
Decision (EU) 2020/614 of the European Central Bank of 30 April 2020 amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2020/25)
OJ L 141, 5.5.2020, p. 28–36 (BG, ES, CS, DA, DE, ET, EL, EN, FR, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
In force
5.5.2020 
EN 
Official Journal of the European Union 
L 141/28 
DECISION (EU) 2020/614 OF THE EUROPEAN CENTRAL BANK
of 30 April 2020
amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2020/25)
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 provided for a third series of targeted longerterm refinancing operations (TLTROsIII) to be conducted over the period from 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 (COVID19), in particular small and mediumsized enterprises, the Governing Council decided to change certain key parameters of TLTROIII. On 16 March 2020, the Governing Council adopted Decision (EU) 2020/407 of the European Central Bank (ECB/2020/13) (3) to implement some of these changes. This Decision is necessary to implement the additional changes decided by the Governing Council, in particular to provide for a temporary reduction in interest rates applied to all TLTROsIII and to lower the lending performance threshold under certain conditions. 
(4) 
As regards the decision to lower the lending performance threshold, the Governing Council decided, on 12 March 2020, that it should be reduced to 0% with respect to the period between 1 April 2020 and 31 March 2021. In order to also take into account the credit already provided by banks since the start of the coronavirus disease (COVID19) crisis in Europe, the starting date of that period is moved to 1 March 2020 as decided on 30 April 2020, while the ending date remains unchanged at 31 March 2021. In addition, to cater for the expected decline in bank lending since 1 March 2020, the deviation from the benchmark outstanding amount to achieve the maximum discount through the previous lending performance criteria is reduced to 1.15% from 2.5%. 
(5) 
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 to provide for an additional temporary reduction in interest rates applied to all TLTROsIII under certain conditions. 
(6) 
In order to apply these adjusted parameters with immediate effect, 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. 
Article 1 is amended as follows:

2. 
Article 5 is replaced by the following: ‘Article 5 Interest 1. The interest rate applicable to amounts borrowed under each TLTROIII by participants whose eligible net lending during the special reference period equals or exceeds their benchmark net lending shall be calculated as follows, subject to the condition set out in Article 6(3a):
2. The interest rate applicable to amounts borrowed under each TLTROIII by participants whose eligible net lending during the special reference period is lower than their benchmark net lending but whose eligible net lending during the second reference period exceeds their benchmark net lending shall be calculated as follows:
3. The interest rate applicable to amounts borrowed under each TLTROIII by participants whose eligible net lending, both during the special reference period and also during the second reference period, is lower than their benchmark net lending shall be calculated as follows:
4. Further details on interest rate calculations are laid down in Annex I. The final interest rate and the relevant data pertaining to its calculation shall be communicated to participants in accordance with the indicative calendar for TLTROsIII published on the ECB’s website. 5. Interest shall be settled in arrears on the maturity of each TLTROIII or on early repayment as provided for in Article 5a, as applicable. 6. 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 TLTROIII outstanding amounts before the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, are communicated to that participant, the interest rate applicable to the amounts borrowed by that participant under each TLTROIII shall be: (a) for the special interest rate period, the average interest rate on the main refinancing operations over that period minus 50 basis points; and (b) for the rest of the life of the respective TLTROIII, the average rate on the main refinancing operation over the life of the respective TLTROIII up to the date on which the repayment was required to be made by the NCB. If such repayment is required after the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, have been communicated to the participant, the interest rate applicable to the amounts borrowed by that participant under each TLTROIII shall be set in accordance with paragraphs 1 to 3.’. 
3. 
Article 6 is amended as follows:

4. 
In Article 7(1), points (b), (d) and (e) are replaced by the following:

5. 
Annexes I and II are amended in accordance with the Annex to this Decision. 
Article 2
Entry into force
This Decision shall enter into force on 5 May 2020.
Done at Frankfurt am Main, 30 April 2020.
For the Governing Council of the ECB
The President of the ECB
Christine LAGARDE
(2) Decision (EU) 2019/1311 of the European Central Bank of 22 July 2019 on a third series of targeted longerterm refinancing operations (ECB/2019/21) (OJ L 204, 2.8.2019, p. 100).
(3) Decision (EU) 2020/407 of the European Central Bank of 16 March 2020 amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2020/13) (OJ L 80, 17.3.2020, p. 23).
ANNEX
Annexes I, II and the TLTROIII reporting table B are amended as follows:
1. 
In Annex I, Section 3 is replaced by the following: 
‘3. Calculation of the interest rate
A. 
Let denote the amount of eligible net lending over the special reference period from 1 March 2020 to 31 March 2021. 
B. 
Let denote the amount obtained by summing the eligible net lending over the period 1 April 2019 to 31 March 2021 and the outstanding amount of eligible loans as at 31 March 2019; this is calculated as: Denote now by the percentage deviation of from the benchmark outstanding amount over the period 1 April 2019 to 31 March 2021, that is, EX will be rounded to 15 decimal positions. Where OAB is equal to zero, EX is deemed to equal 1.15. 
C. 
Let be the average of the main refinancing operation (MRO) rate applicable over the life of TLTROIII and expressed as an annual percentage rate and let be the average of the deposit facility (DF) rate applicable over the life of TLTROIII k, where the applicable interest rate refers to the life of the respective TLTROIII, and expressed as an annual percentage rate, i.e.: In the above equations (for k=1,…,7) denotes the number of days of the TLTROIII k and, where the MRO is conducted under a fixedrate full allotment regime, denotes the rate applied to the MRO on the tth day of the TLTROIII k, or, where the MRO is conducted under a variablerate tender procedure, denotes the minimum bid rate applied to the MRO on the tth day of the TLTROIII k, and in each case is expressed as an annual percentage rate. In the above equations denotes the rate applied to the deposit facility on the tth day of the TLTROIII k, and expressed as an annual percentage rate. 
D. 
Let kspecial denote the special interest rate period being the period from 24 June 2020 to 23 June 2021, and krol denote the two periods that constitute the rest of the life of the respective TLTROIII k (referring to the period from the settlement date of the respective TLTROIII until 23 June 2020 and the period from 24 June 2021 until the maturity of the respective TLTROIII or until its early repayment date, as applicable). Let be the average of the MRO rate applicable during the special interest rate period from 24 June 2020 to 23 June 2021 of TLTROIII k expressed as an annual percentage rate and let be the average of the DF rate applicable during the special interest rate period from 24 June 2020 to 23 June 2021 of TLTROIII k and in each case expressed as an annual percentage rate, i.e.: In the above equations denotes the number of days of the period of the TLTROIII k and, where the MRO is conducted under a fixedrate full allotment regime, denotes the rate applied to the MRO on the tth day of the period of the TLTROIII k, or, where the MRO is conducted under a variablerate tender procedure, denotes the minimum bid rate applied to the MRO on the tth day of the period of the TLTROIII k, and in each case is expressed as an annual percentage rate. In the above equations denotes the rate applied to the deposit facility on the tth day of the period of the TLTROIII k, and expressed as an annual percentage rate. 
E. 
Let the interest rate incentive adjustment, where applicable, measured as a fraction of the average corridor between the and the , be denoted ; 
F. 
Let the interest rate to be applied for the life of a TLTROIII k (final interest rate), expressed as an annual percentage rate, be denoted Let the interest rate to be applied for a period , with j = special or rol, of a TLTROIII k, expressed as an annual percentage rate, be denoted . 
G. 
The interest rate is defined as: In the above equation denotes the number of days of the period of the TLTROIII k. 
The interest rate applicable to each TLTROIII k is calculated as follows:
(a) 
If a participant equals or exceeds its benchmark net lending in the special reference period, the interest rate to be applied to amounts borrowed by that participant under TLTROsIII is:

(b) 
If a participant does not equal or exceed its benchmark net lending in the special reference period but exceeds its benchmark outstanding amount of eligible loans during the second reference period by at least 1.15 %, the interest rate to be applied to amounts borrowed by that participant under TLTROsIII is:

(c) 
If a participant does not equal or exceed its benchmark net lending in the special reference period but exceeds its benchmark outstanding amount of eligible loans during the second reference period by less than 1.15 %, the interest rate to be applied to amounts borrowed by that participant under TLTROsIII is:

(d) 
If a participant does not equal or exceed its benchmark net lending in the special reference period nor does it exceed its benchmark outstanding amount in the second reference period, the interest rate to be applied to amounts borrowed by that participant under TLTROsIII is:
The interest rate incentive adjustment () will be expressed by rounding to 15 decimal positions. The interest rates and will be expressed by rounding to 15 decimal positions. The final interest rate will be expressed as an annual percentage rate, rounded down to the fourth decimal position.’ 
2. 
Annex II is amended as follows:

‘TLTROIII reporting template B