Featured Product

    ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs

    November 19, 2020

    In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans. The letter notes that any substantial amendment of the AnaCredit Regulation, including the possible inclusion of a requirement for banks to disclose the environmental characteristics of their loans, would require a careful impact assessment, including a merits-and-costs procedure. With respect to the question on whether ECB could make its TLTROs dependent on the climate-related impact of bank loans, the letter notes that ECB will consider whether and how its monetary policy could take climate change considerations into account in line with its competences and mandate in the context of the strategy review.

    With respect to the question about amendments to the AnaCredit Regulation, the letter stated that the new requirements would need to be translated into a draft update of the AnaCredit Regulation (or its future successor, the Integrated Reporting Framework, or IReF, Regulation), which would then be subject to a public consultation prior to its adoption by the Governing Council of ECB. Moreover, any collection of additional data would require discussion on whether this is necessary and appropriate to deliver the additional information required for monetary policy and financial stability tasks. To date, the Governing Council has not yet discussed any amendment to the AnaCredit Regulation. More fundamentally, a key precondition for the collection of such data through AnaCredit is that banks are able to collect the respective information from their customers. To ensure sufficient detail and quality of information, a standardized framework is needed to allow banks to determine the environmental impact of their credit exposures on the basis of a set of commonly agreed criteria. Establishing a reliable information basis would require close cooperation among the EU co-legislators, EC, and ECB as well as coordination with the current and upcoming policy initiatives on sustainable finance and non-financial disclosures.

    In response to the question about TLTROs, the letter highlighted that ECB has been making adjustments to the design of its asset purchase programs and to its collateral framework which signal the support of Eurosystem for innovation in the area of sustainable finance. In particular, this includes the decision of ECB to make bonds with coupon structures linked to certain sustainability performance targets eligible as collateral for Eurosystem credit operations and for Eurosystem outright purchases for monetary policy purposes, provided they comply with all other eligibility criteria. In addition, ECB supports action against climate change through its own investment decisions. Finally, with respect to whether ECB could expand the eligible assets for TLTROs to include loans for the purchase of climate-neutral housing, as in the first two series of TLTROs, eligible loans under the third series of TLTROs continue to be defined as loans to euro area non-financial corporations and households excluding loans to households for house purchase. Loans for house purchase were considered to be adequately served by the banking sector, and their exclusion was designed to avoid contributing to potential financial imbalances in housing markets. In line with their treatment in the statistical framework, which is the basis for TLTRO reporting, loans to households for house purchase include loans for refurbishment purposes in all euro area countries.

     

    Related Link: Letter (PDF)

     

    Keywords: Europe, EU, Banking, AnaCredit, TLTRO, Reporting, Sustainable Finance, Climate Change Risk, ESG, ECB

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582