3.2.2021 
EN 
Official Journal of the European Union 
L 38/93 
DECISION (EU) 2021/124 OF THE EUROPEAN CENTRAL BANK
of 29 January 2021
amending Decision (EU) 2019/1311 on a third series of targeted longerterm refinancing operations (ECB/2021/3)
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 longerterm refinancing operations (TLTROsIII) 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 (COVID19), in particular small and mediumsized enterprises, the Governing Council decided to change certain key parameters of TLTROsIII. 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 some 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 mediumterm price stability. As part of these measures, the Governing Council decided to further recalibrate the conditions of TLTROsIII. 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 TLTROsIII from 50 per cent to 55 per cent 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 TLTROsIII to June 2022 will be made available only to banks that achieve a new lending performance target. 
(5) 
The Governing Council considers the full range of measures adopted on 10 December 2020 necessary and proportionate to counter the serious risks to price stability, the monetary policy transmission mechanism and the economic outlook in the euro area, which are posed by the continued severe pandemic conditions. The Governing Council remains of the view that the recalibration of certain parameters of TLTROsIII reflected in this Decision is an incentive for credit institutions to sustain the current level of lending and would help preserve the very attractive funding conditions that in the past months had supported the flow of credit to the real economy, even at a time of high stress. The Governing Council also considers that the recalibration of the TLTROsIII parameters is the most suitable and appropriate tool to help credit institutions secure the liquidity required to extend loans to households and firms on very favourable terms over the pandemic period, for the purposes of achieving the European Central Bank’s price stability mandate. The Governing Council continues to stand ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner, in line with its commitment to symmetry. 
(6) 
In order to enable shifts from already outstanding TLTROsIII to the newly announced additional operations as of September 2021, early repayment notification deadlines have been brought forward by one week, so that the amounts to be repaid under the voluntary early repayment procedure can be taken into account for the calculation of bid limits. 
(7) 
Credit institutions leading TLTROIII groups intending to participate in the seventh TLTROIII have a very short deadline within which to apply for recognition of the group or changes to an existing group. For this reason, the changes to the parameters for group participation introduced by this Decision need to be made known to credit institutions as quickly as possible. Therefore, this Decision should enter into force without delay. 
(8) 
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. 
in Article 2, paragraph 1 is replaced by the following: ‘1. The Eurosystem shall conduct ten TLTROsIII in accordance with the indicative calendar for TLTROsIII published on the ECB's website.’; 
3. 
Article 3 is amended as follows:

4. 
Article 4 is amended as follows:

5. 
Article 5 is replaced by the following: ‘Article 5 Interest 1. The interest rate applicable to amounts borrowed under each of the first seven TLTROsIII by participants whose eligible net lending during the special reference period equals or exceeds their benchmark net lending and whose eligible net lending during the additional special reference period is lower than 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 of the first seven TLTROsIII by participants whose eligible net lending during the special reference period and during the additional 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 of the first seven TLTROsIII by participants whose eligible net lending during the second reference period, the special reference period and the additional special reference period is lower than their benchmark net lending shall be calculated as follows:
3a. Notwithstanding paragraphs 1 to 3, the interest rate applicable to amounts borrowed under each of the first seven TLTROsIII by participants whose eligible net lending during the additional special reference period equals or exceeds their benchmark net lending shall be calculated as follows, subject to the condition set out in Article 6(3b):
3b. The interest rate applicable to amounts borrowed under the eighth or subsequent TLTROsIII by participants whose eligible net lending during the additional special reference period equals or exceeds their benchmark net lending shall be calculated as follows, subject to the condition set out in Article 6(3b):
3c. The interest rate applicable to amounts borrowed under the eighth or subsequent TLTROsIII by participants whose eligible net lending during the additional special 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 outstanding amounts in one of the first seven TLTROsIII before the interest data related to the second and the special reference periods are communicated to that participant, the interest rate applicable to the amounts borrowed by that participant under each of the first seven TLTROsIII and subject to mandatory repayments 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; (b) for the additional special interest rate period, the average interest rate on the main refinancing operations over that period minus 50 basis points; and (c) for the rest of the life of the respective TLTROIII, the average rate on the main refinancing operations 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 interest data related to the second and the special reference periods have been communicated to the participant but before the interest rate related data of the additional special reference period have been communicated to the participant, the interest rate applicable to the amounts borrowed by that participant under each of the first seven TLTROsIII and subject to mandatory repayments shall be set in accordance with paragraphs 1 to 3. If such repayment is required after the interest related data of the additional special reference period have been communicated to the participant, the interest rate applicable to the required repayment amounts borrowed by that participant under each of the first seven TLTROsIII shall be set in accordance with paragraphs 1 to 3a. 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 in the eighth or subsequent TLTROsIII before the resulting interest rate for the additional special reference period has been communicated to the participant, the interest rate applicable to the amounts borrowed by that participant under the eighth or subsequent TLTROsIII shall be set in accordance with paragraph 3c. If such repayment is required after the interest related data of the additional special reference period have been communicated to the participant, the interest rate applicable to the required repayment amounts borrowed by that participant under the eighth or subsequent TLTROsIII shall be set in accordance with paragraphs 3b and 3c. 7. If counterparties voluntarily repay early amounts borrowed in one of the first seven TLTROsIII in line with Article 5a before the interest related data of the additional special reference period have been communicated to them, the interest rate for the additional special interest rate period shall be calculated in accordance with paragraphs 1(b), 2(b) and 3(b).’; 
6. 
Article 5a is amended as follows:

7. 
Article 6 is amended as follows:

8. 
Article 7 is replaced by the following: ‘Article 7 Noncompliance with reporting requirements 1. Where a participant fails to submit a report or comply with audit requirements, or where errors are identified in the data reported, the following shall apply:
2. Paragraph 1 shall be without prejudice to any sanction that may be imposed pursuant to Decision ECB/2010/10 (*1) in respect of the reporting obligations laid down in Regulation (EU) No 1071/2013 (ECB/2013/33). 3. For the avoidance of doubt, the reporting requirements and related sanctions in case of noncompliance laid down in paragraph 1 shall only apply if the participant participates in TLTROIII. (*1) Decision ECB/2010/10 of 19 August 2010 on noncompliance with statistical reporting requirements (OJ L 226, 28.8.2010, p. 48).’;" 9. 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 the day following that of its publication in the Official Journal of the European Union.
Done at Frankfurt am Main, 29 January 2021.
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).
(4) 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).
ANNEX
Annexes I and II to Decision (EU) 2019/1311 (ECB/2019/21) are amended as follows:
1. 
Annex I is amended as follows:

‘3. Calculation of the interest rate
A. 
Let NLSpecial denote the amount of eligible net lending over the special reference period from 1 March 2020 to 31 March 2021. NLSpecial = NLMar 2020 + ... + NLMar 2021 
B. 
Let NLADSpecial denote the amount of eligible net lending over the additional special reference period from 1 October 2020 to 31 December 2021. NLADSpecial = NLOct 2020 + ... + NLDec 2021 
C. 
Let NSMar 2021 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: NSMar 2021 = OLMar 2019 + NLApr 2019 + ... + NLMar 2021 Denote now by EX the percentage deviation of NSMar 2021 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. 
D. 
Let be the average of the main refinancing operation (MRO) rate applicable over the life of TLTROIII k 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 nk (for k=1,…,10) denotes the number of days of the TLTROIII k and, where the MRO is conducted under a fixedrate full allotment regime, MROk,t 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, MROk,t 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 DFk,t denotes the rate applied to the deposit facility on the tth day of the TLTROIII k, and expressed as an annual percentage rate. 
E. 
Let kpre denote the period from the settlement date of the respective TLTROIII until 23 June 2020, kspecial denote the special interest rate period from 24 June 2020 to 23 June 2021, kadspecial denote the additional special interest rate period from 24 June 2021 to 23 June 2022, and kpost denote the period from 24 June 2022 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 kspecial 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 kspecial 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 kspecial 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 kspecial of the TLTROIII k, and expressed as an annual percentage rate. Let be the average of the MRO rate applicable during the additional special interest rate period from 24 June 2021 to 23 June 2022 of TLTROIII k expressed as an annual percentage rate and let be the average of the DF rate applicable during the additional special interest rate period from 24 June 2021 to 23 June 2022 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 kadspecial 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 kadspecial 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 kadspecial 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 kadspecial of the TLTROIII k, and expressed as an annual percentage rate. 
F. 
Let the interest rate incentive adjustment, where applicable, measured as a fraction of the average corridor between the and the , be denoted iri. 
G. 
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 rk
. Let the interest rate to be applied for a period kj, with j = pre, special, adspecial or post, of a TLTROIII k, expressed as an annual percentage rate, be denoted . 
H. 
The interest rate rk is defined as: In the above equation denotes the number of days of the period kpre of the TLTROIII k and denotes the number of days of the period kpost of the TLTROIII k. The interest rate applicable to each TLTROIII k is calculated as follows:

2. 
Annex II is amended as follows:

(*1) References to a “participant” should be understood as applying to individual participants or TLTROIII groups.’;”