ESMA Promotes Transparency For TLTRO III Transactions

6 Jan 2021 12:35 PM

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, issues today a public statement promoting transparency in the IFRS financial statements of banks regarding accounting for the third series of the European Central Bank’s (ECB) Targeted Longer-Term Refinancing Operations (TLTRO III).

ESMA observes that, in practice, there is diversity regarding the accounting treatment of the ECB’s TLTRO III refinancing transactions by banks. ESMA believes that, given the overall volume of the TLTRO III operations, this matter may have a material effect on the financial statements of banks and may be widespread across the EU. Therefore, ESMA emphasises the importance of providing an adequate level of transparency regarding the accounting treatment of these transactions in the financial statements of banks.

The main recommendations for affected banks are:

Next steps

ESMA intends to submit questions related to this matter to the IFRS Interpretations Committee for consideration.

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Public Statement Targeted Longer-term Refinancing Operations III

ESMA32-339-149 Public statement targeted longer-term refinancing operations III.PDF (115.66 KB)