Division 1 Calculation of borrowing allowance and bid limit

Participants in one of the second series of targeted longer-term refinancing operations (TLTRO-II), acting either individually or as the lead institution of a TLTRO-II group, are subject to a borrowing allowance. The borrowing allowance calculated will be rounded up to the next multiple of EUR 10 000.

The borrowing allowance applicable to an individual participant in the TLTROs-II is calculated on the basis of the amount of eligible loans outstanding as at 31 January 2016. The borrowing allowance applicable to the lead institution of a TLTRO-II group is calculated on the basis of the amount of eligible loans outstanding as at 31 January 2016 in relation to all members of that TLTRO-II group.

The borrowing allowance equals 30 % of the outstanding amount of eligible loans relating to the participant^f1 as at 31 January 2016 minus the amounts borrowed by the participant in the targeted longer-term refinancing operations (TLTROs) conducted in September and December 2014 pursuant to Decision ECB/2014/34 and still outstanding at the settlement date of a TLTRO-II, i.e.:

BA_k = 0,3 × OL_Jan2016 – OB_k for k = 1,…,4

Here BA_k is the borrowing allowance in TLTRO-II k (with k = 1,…,4), OL_Jan2016 is the amount of eligible loans held by the participant which are outstanding as at 31 January 2016 and OB_k is the amount borrowed by the participant in TLTRO1 and TLTRO2 of the first TLTRO series and still outstanding on the settlement date of a TLTRO-II k.

The bid limit applicable to each participant in each TLTRO-II is the borrowing allowance minus the participant's borrowing in the previous TLTROs-II.

Let C_k ≥ 0 be the borrowing of a participant in TLTRO-II k. The bid limit BL_k for this participant in operation k is:

• BL ₁ = BA ₁ and

• ${\mathrm{BL}}_k={\mathrm{BA}}_k-\sum _{j=1}^{k-1}{C}_j$ , for k = 2, 3, 4.