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Reuters recently reported that the ECB’s reinvestment policy tweaks, including the shift to the new capital key, was aimed to be broadly ‘market-neutral.’

Key quotes

  • ECB weighing three options on how new capital key is applied to the stock of bonds.
  • ECB shift to new capital key with regard to flow of reinvestments could be done over course of several years.
  • ECB comfortable with market expectations that reinvestments will go on for 2 to 3 years.    
  • ECB policymakers leaning towards only nuanced tweaks in reinvestment policy, including open-ended time horizon.