On 10 March 2016, in pursuing its price stability mandate, the Governing Council decided to launch a new series of four targeted longer-term refinancing operations (TLTROs-II), with the aim of further easing private sector credit conditions and stimulating credit creation. The TLTROs-II are intended to strengthen the transmission of monetary policy by further incentivising bank lending to the non-financial private sector, i.e. households and non-financial corporations, in Member States whose currency is the euro. This measure is not intended to support bank lending to households for the purposes of house purchases. Eligible lending to the non-financial private sector in the context of this measure therefore excludes loans to households for the purposes of house purchases. In conjunction with other non-standard measures in place, TLTROs-II aim to contribute to a return of inflation rates to levels below, but close to, 2 % over the medium term.

As with the first series of TLTROs, in order to facilitate the participation of institutions that, for organisational reasons, borrow from the Eurosystem by means of a group structure, participation in TLTROs-II will be possible on a group basis where there is an institutional basis for group treatment. Group participation will be conducted through one specific group member and where prescribed conditions have been fulfilled. Moreover, in order to address the issues related to intra-group liquidity distribution, in the case of groups that are established on the basis of close links between members, all group members will have to formally confirm in writing their participation in the group. A TLTRO group that was recognised for the purposes of TLTROs pursuant to Decision ECB/2014/34 may participate in TLTROs-II as a TLTRO-II group subject to certain procedures concerning notification and recognition.

The overall amount that may be borrowed under all TLTROs-II will be determined on the basis of a participant's total amount of eligible loans to the non-financial private sector outstanding as at 31 January 2016, less any amount previously borrowed by the TLTRO-II participant under the first two TLTROs conducted in September and December 2014 pursuant to Decision ECB/2014/34 and still outstanding on the settlement date of a TLTRO-II.

The interest rate applicable to each TLTRO-II will be determined based on the lending history of the participant in the period 1 February 2016 to 31 January 2018 in accordance with the principles set out in this Decision.

Starting 24 months after the settlement of each TLTRO-II, participants will have the option to repay amounts allotted in accordance with prescribed procedures on a quarterly basis.

Institutions that wish to participate in TLTROs-II will be subject to certain reporting requirements. The reported data will be used: (a) in determining the borrowing allowance; (b) in calculating the applicable benchmark; (c) to assess participants' performance against their benchmarks; and (d) for other analytical purposes as required for performing Eurosystem tasks. It is further envisaged that the national central banks of Member States whose currency is the euro (hereinafter ‘NCBs’) in receipt of reported data may exchange such data within the Eurosystem to the extent and to the level necessary for the proper implementation of the TLTRO-II framework, as well as an analysis of its effectiveness and for other Eurosystem analytical purposes. Reported data may be shared within the Eurosystem for the purpose of validating the data provided.

In order to allow credit institutions sufficient time to make operational preparations for the first TLTRO-II, this Decision should enter into force without undue delay,