ECB Outlines Views on Possible Changes to AnaCredit Rule and TLTROs
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

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
FED Proposes to Extend Data Collection Under Stress Testing Guidance
FED proposed three-year extension, without revision, of the information collection FR 4202, titled "Recordkeeping Provisions Associated with Stress Testing Guidance."
FCA Proposes Updates to Guidance on Mortgage Repossessions
FCA updated the draft guidance for firms to ensure that mortgage customers whose homes may be repossessed are treated fairly and appropriately, particularly where there are risks of harm to customers who are vulnerable as a result of the COVID-19 pandemic.
FCA Announces Cessation Timeline for Certain LIBOR Benchmark Settings
FCA issued a statement on the cessation or loss of representativeness of the 35 LIBOR benchmark settings published by ICE Benchmark Administration or IBA.
EBA Publishes Reporting and Disclosures Framework for Investment Firms
EBA published a package that includes the final draft implementing technical standards on supervisory reporting and disclosures of investment firms.
BIS Examines Use of Big Data and Machine Learning at Central Banks
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA Finalizes Reporting Standard for Operational Risk Requirements
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB Publishes Guide for Determining Penalties for Regulatory Breaches
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS Sets Out Good Practices to Manage Operational Risks Amid COVID
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR Announces New Data Collection Application for Banks and Insurers
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.