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FrankfortAccording to insiders, the ECB could give national central banks more leeway to reinvest funds from billions of bond purchases. The specialized departments will develop appropriate proposals, said one of the people familiar with the Reuters case.
Proposals are underway to extend the period of several months during which matured bonds are reinvested. Euro central banks would thus be better able to manage the peaks of maturity. Currently, reinvestments must be made in the same or next two months.
The ECB declined to comment on this information. The latest meeting of the ECB on interest rates will take place on December 13 in Frankfurt. ECB President Mario Draghi announced decisions on the future reinvestment policy following the December interest rate meeting.
The monetary authorities wish to end their bond purchase program, which has since been set at 2.6 trillion euros, until the end of the year, if the economy allows it. However, funds from maturing securities must be reinvested in bonds for a longer period.
Most purchases under the buyback program are made by the national central banks of the euro area countries. Transactions are organized according to the so-called capital key. This framework guarantees the purchase of more government bonds from countries offering more equities to the ECB. This is why a particularly large number of federal bonds are acquired.
According to the calculations of the insurer Allianz, about 165 billion euros will have to be reinvested the next year. About 30% of reinvestments are attributable to German debt, according to Allianz in 2019, and just over 20% in France. According to Allianz, just over 15% is Italian paper.
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