5.4.1.3 No interference with the single monetary policy of the Eurosystem

In order to ensure that ELA operations do not interfere with the single monetary policy of the Eurosystem, the ECB has to be informed, regardless of the size or nature of the ELA operations, of the details of any ELA operation, at the latest, within two business days after the operation was carried out. After the initial notification, further relevant information should be provided on an ongoing basis until the ELA is repaid. In addition, the bank receiving ELA must provide a funding plan within two months following the first provision of ELA. For as long as the bank is receiving ELA, it must update the funding plan on a quarterly basis. On a monthly basis, the bank must also provide up-to-date information on the precise level of regulatory capital ratios as well as the leverage ratio. Any bank in breach of the own funds requirements under the CRR must submit a recapitalisation plan to the ECB. Lastly, where ELA is provided for a period longer than six months, the governor(s) of the national central bank(s) involved must address a letter to the President of the ECB outlining the intended exit strategy.1

Where the size of ELA operations envisaged by one or more national central banks for a bank or banking group exceeds a threshold of EUR 500 million, the national central bank(s) involved should inform the Executive Board of the ECB at the earliest possible time prior to the extension of assistance2.

Where the size of ELA operations envisaged by one or more national central banks for a bank or banking group exceeds a threshold of EUR 2 billion, the Executive Board of the ECB has to timely decide whether the issue needs to be addressed by the Governing Council of the ECB. If the Executive Board comes to the conclusion that there is a risk that the respective ELA interferes with the single monetary policy of the Eurosystem, it will ask the Governing Council to take a position on this issue at short notice. The national central bank(s) is (are) free to undertake the planned ELA operations unless the Governing Council decides to prohibit the execution of the operations, on the grounds that they interfere with the Eurosystem’s single monetary policy, within 24 hours of the notification by the national central bank(s).3

In addition, the Governing Council has the following powers under the ELA Agreement: