Monetary policy

How are the pandemic emergency longer-term refinancing operations (PELTROs) and the TLTRO III operations different?

The third series of the targeted longer-term refinancing operations (TLTRO III) has been one of the main measures for responding to the impact of the coronavirus crisis on the economy. TLTRO III was announced by the European Central Bank (ECB) in September 2019, before the outbreak of the coronavirus crisis, but it was adapted at the start of the pandemic to alleviate its possible effects on bank lending. Under the TLTRO III, banks can obtain financing from the ECB with a three-year maturity at a very low cost, which is particularly favourable if they meet certain targets in terms of lending to firms and households. These advantageous cost conditions were applied from 24 June 2020 until 23 June 2022.

As a complement to the TLTRO III, in April 2020 the ECB Governing Council announced seven additional longer-term refinancing operations for banks, with no lending target, called pandemic emergency longer-term refinancing operations (PELTROs), to ensure liquidity in the market and smooth financing conditions during the pandemic. In December 2020, a further four operations were added for 2021.