ECB Bond Reinvestments Could Be Shock Absorber as QE Decelerates
- About 15 billion euros a month of holdings will mature in 2018
- Board member Praet says stimulus reduction must be orderly
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As the European Central Bank prepares to slow its bond-buying program, policy makers are considering softening the blow by highlighting a related measure -- the reinvestment of maturing debt.
An average of 15 billion euros ($18 billion) a month of assets held under quantitative easing will mature next year, according to euro-area central bank officials who said the figure was presented at the last Governing Council meeting. While the plan to reinvest that cash has long been a part of policy, the ECB is concerned that investors are under-appreciating its impact, three people said. A spokesman for the central bank declined to comment.