ECONOMY

ECB would like Greece to introduce capital controls, claims German daily

The European Central Bank would feel more comfortable if Greece introduced capital controls to stem the outflow of deposits from the country’s banks, the Frankfurter Allgemeine Zeitung (FAZ) reported on Thursday, citing central bank sources.

The ECB agreed a modest increase in emergency funding for Greek banks on Wednesday, putting pressure on Athens to strike a financing deal with its European partners before its lenders run out of money.

“The ECB Governing Council and the ECB banking supervisor would be more comfortable if there were capital controls to prevent the banks bleeding (money),” the FAZ quoted an ECB source as saying.

The FAZ is a conservative German newspaper, which often takes a stance similar to that of the Bundesbank. The ECB declined to comment on the report.

Greek banks have seen deposit outflows pick up in recent days as the new leftist-led government has failed to agree an extension of its international bailout, which expires on Feb. 28.

[Reuters]