Our good friends at Livesquawk reporting an article doing the rounds via Reuters 1 July
"The European Central Bank is not currently considering buying government debt out of proportion to Eurozone countries' shareholding in the bank and the hurdle for abandoning this capital key is high, sources close to the ECB said earlier today.
Bond markets rallied earlier after Bloomberg reported that the ECB was considering giving up the capital key due to a shortage of German paper, which investors see as safe and have piled into in the aftermath of Britain's vote to leave the European Union.
But sources familiar with the ECB's thinking said that several other changes would be first considered before any such move, which would be have heavy political ramifications, especially in Germany, where many are already uneasy about the ECB's quantitative easing.
In case of shortage of papers to buy, it would first consider raising the limit on how much it can purchase of each bond issue that is not protected by collective action clauses, the sources said. Or it would amend rules about which assets it can buy to expand the eligible pool.
"As in the past, we'll amend the rules if necessary but it's not on the agenda now," a Governing Council member, asking not to be named, told Reuters. "I would expect such changes to be quite technical. The capital key would be political, however."
ECB have officially declined to comment but the apparent denial helped underpin the euro
