Longer-term refinancing operations and Loss-sharing rule: Difference between pages

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(LTRO).
An agreement between participants in a transfer system or clearing house arrangement regarding the allocation of any loss arising when one or more participants fail to fulfil their obligation.  


Longer-term refinancing operations by the European Central Bank (ECB) through member national central banks (NCBs) with eligible monetary institutions are liquidity-providing reverse transactions that are regularly conducted with a monthly frequency and a maturity of three months. These transactions are 'long-term' in relation to those under its main refinancing operations (MROs or MRO) that have a maturity of one week.
The arrangement stipulates how the loss will be shared among the parties concerned in the event that the agreement is activated.  


Longer-term refinancing operations may also be conducted at irregular intervals or with other maturities, e.g. the length of one maintenance period, six months, twelve months or thirty-six months are also possible.  
Also known as Loss-sharing agreement.


== See also ==
* [[Loss]]


The ECB also has a programme of targeted longer-term refinancing operations (T-LTROs or TLTROs) intended to stimulate certain types of lending by banks.
These targeted operations have aimed to stimulate, for example:
*Banks' total private-sector loans outstanding
*The flow of such lending.
==See also==
* [[Central bank]]
* [[European Central Bank]]
* [[Main refinancing operations]]
* [[Monetary policy]]
* [[Open market operations]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 14:20, 23 October 2012

An agreement between participants in a transfer system or clearing house arrangement regarding the allocation of any loss arising when one or more participants fail to fulfil their obligation.

The arrangement stipulates how the loss will be shared among the parties concerned in the event that the agreement is activated.

Also known as Loss-sharing agreement.

See also