July 26, 2018 / 1:20 PM / 10 months ago

ECB's Draghi: Capital key to underpin any reinvestment decisions

FRANKFURT (Reuters) - The European Central Bank will base any decisions on reinvesting the cash it receives from maturing bonds on its capital key, the amount of money each of its member central banks contribute to the ECB, president Mario Draghi said on Thursday.

“The capital key remains our anchor in what we do on reinvestments, just to clear the slate from any doubt,” Draghi told reporters.

The ECB has pledged to continue reinvesting the cash it gets from maturing bonds for a long time after it stops adding to its 2.6 trillion euro pile at the end of this year.

Sources told Reuters last month that its main objective was to counter the natural “ageing” of the bond portfolio and that one option being considered was to buy more long-dated paper.

But Draghi also said there had been no fresh talks on the reinvestment issue at the latest ECB meeting.

“On the reinvestment, we haven’t discussed it,” he said.

Reporting By Francesco Canepa; Editing by Hugh Lawson

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