The president of the ECB, Christine Lagarde, in the press conference following the announcement on rates which today, for the second consecutive time, were raised by 75 basis points, confirmed that the Governing Council has made changes to the maxi-loan program for banks, known as TLTRO III. Thus we read in the communiqué of the European Central Bank:
“The Governing Council has also decided to amend the terms and conditions applied to the third series of targeted longer-term refinancing operations (TLTRO-III). During the acute phase of the pandemic, this tool was essential to counter the downside risks to price stability. Today, in light of the unexpected and exceptional rise in inflation, the instrument needs to be recalibrated to ensure that it is consistent with the broader monetary policy normalization process and reinforces the pass-through of policy rate increases to lending conditions. banking. Therefore, the Governing Council has decided to change the interest rates applicable to TLTRO-III starting from 23 November 2022 and to offer banks additional dates for voluntary early repayment of the amounts “.
“Finally – reads the note from the ECB – the Governing Council has decided to set the remuneration of the compulsory reserves held by credit institutions with the Eurosystem at the rate of the ECB on deposits with the central bank, in order to better align this remuneration with money market conditions. Details of the changes to the terms and conditions of TLTRO-III are described in a separate press release to be published at 3.45pm (Central European Time). A further press release of technical content, specifying the changes to the remuneration of the mandatory reserves, will be released at 3.45 pm (Central European time) ”.