Decision of the European Central Bank of 29 July 2014 on measures relating to targeted longer-term refinancing operations (ECB/2014/34) (2014/541/EU)

2. General information

The measures to be used in the calculation of the borrowing allowances (limits) and mandatory early repayments relate to loans to euro area non-financial corporations and loans to euro area households (1), excluding loans for house purchase , in all currencies. For each specified reporting period, information on outstanding amounts of eligible loans at the end of the month preceding the start of the period and at the end of the period, as well as eligible net lending during the period (calculated as gross lending net of loan repayments) must be reported separately for non-financial corporations and for households. These indicators are adjusted for the impact of traditional securitisation and other loan transfers. Detailed information on the relevant sub-components of these items, as well as on effects that result in changes in outstanding amounts but are not related to transactions (hereinafter ‘adjustments to the outstanding amounts’), must also be provided.

As regards the use of the collected information, it is stressed that data on outstanding amounts of eligible loans as at 30 April 2014 will be used to determine the initial borrowing allowance, while data on eligible net lending during the period 1 May 2013 to 30 April 2014 will be used for the calculation of the benchmark. Outstanding amounts of eligible loans and eligible net lending data for the reporting periods until 30 April 2016 will be used for the calculation of additional borrowing allowances, for the calculation of mandatory early repayments (for reporting periods from 1 May 2014 to 30 April 2016) and for monitoring purposes. Data reported subsequently for the periods until the maturity of the operations in September 2018 will be used only for monitoring purposes. All other indicators included in the template are necessary to verify the internal consistency of the information and its consistency with the statistical data collected within the Eurosystem, as well as for in-depth monitoring of the impact of the TLTRO programme.

The general framework underlying the completion of the reporting template is provided by the reporting requirements of euro area MFIs in the context of MFI balance sheet items (BSI) statistics, as specified in the ECB's BSI Regulation. These guidelines make reference to the requirements of the recast BSI Regulation (EU) No 1071/2013 of the European Central Bank (ECB/2013/33)(2), the first reporting requirements in relation to which start with data from December 2014(3). In particular, as regards loans, Article 8(2) of Regulation (EU) No 1071/2013 (ECB/2013/33) requires that they ‘shall be reported at their principal amount outstanding at the end of the month. Write-offs and write-downs as determined by the relevant accounting practices shall be excluded from this amount. […] loans shall not be netted against any other assets or liabilities’. However, in contrast to the rules laid down in Article 8(2), which also imply that loans are to be reported gross of provisions, Article 8(4) states that ‘NCBs may allow the reporting of provisioned loans net of provisions and the reporting of purchased loans at the price agreed at the time of their acquisition [i.e. their transaction value], provided that such reporting practices are applied by all resident reporting agents’. The implications that this deviation from the general BSI guidance has for the completion of the reporting template are reviewed in more detail below.

Regulation (EU) No 1071/2013 (ECB/2013/33) should also be used as the reference document as regards the definitions to be applied in the completion of the template. See, in particular, Article 1 for general definitions, and Parts 2 and 3 of Annex II for a definition of the instruments to be covered under ‘loans’ and of the sectors of participants respectively(4). It is notable that in the BSI framework accrued interest receivable on loans is, as a rule, subject to on-balance sheet recording as it accrues (i.e. on an accrual basis rather when it is actually received), but should be excluded from the data on outstanding amounts of loans. However, capitalised interest should be recorded as part of the outstanding amounts.

While much of the data to be reported in the template are already compiled by MFIs in accordance with the requirements of Regulation (EU) No 1071/2013 (ECB/2013/33), some additional information must be compiled from the participants bidding in TLTROs. The methodological framework of BSI statistics, as laid down in the Manual on MFI balance sheet statistics(5), provides all the background information required in order to compile these additional data; further details are provided below in the definitions of the individual indicators.

(1)

For the purposes of the reporting template ‘households’ includes non-profit institutions serving households.

(2)

Regulation (EU) No 1071/2013 of the European Central Bank of 24 September 2013 concerning the balance sheet of the monetary financial institutions sector (ECB/2013/33) (OJ L 297, 7.11.2013, p. 1).

(3)

MFI reporting under Regulation (EU) No 1071/2013 (ECB/2013/33) will commence with effect from the reference month of December 2014. The previous legal act forming the basis for the reporting of BSI statistics is Regulation (EC) No 25/2009 (ECB/2008/32). This Regulation therefore applies to the TLTRO data reporting for reference periods until December 2014. However, the differences between the two Regulations are not significant in terms of their impact on the TLTRO programme, with the exception of the definition of ‘non-financial corporations’ (see footnote 13 below).

(4)

The sector classification of the head offices and holding corporations of non-financial corporations in Regulation (EC) No 25/2009 (ECB/2008/32) has been amended in Regulation (EU) No 1071/2013 (ECB/2013/33) to reflect changes in international statistical standards. Under Regulation (EU) No 1071/2013 (ECB/2013/33), head offices and holding corporations of non-financial corporations are reclassified as financial corporations. TLTRO reporting must in principle be in line with the BSI framework: with effect from December 2014 data should not cover head offices and holding corporations and adjustments should be transmitted accordingly.

(5)

See the ‘Manual on MFI balance sheet statistics’, ECB, April 2012, available at http://www.ecb.europa.eu. In particular, Section 2.1.4, p. 76, deals with the statistical reporting of loans.