Bundesbank chief tells peers of concern over funding Greek banks

The head of the Bundesbank expressed serious concern about providing continued emergency funding to Greek banks in talks with his peers this week, a person familiar with the discussion said.

“He has made his concerns clear from the start,” said the person, adding that Jens Weidmann had raised the issue this week in a telephone call among eurozone central bank chiefs and the European Central Bank’s executive.

As president of the Bundesbank, Weidmann also sits on the ECB’s Governing Council, which holds daily phone calls to discuss the extension of emergency funding to Greek banks. This group can restrict such funding if a two-thirds majority agrees.

Although Weidmann has warned against the use of such emergency credit to prop up Greece’s banks ever since those lenders started to rely on it in February, his latest intervention, as Greece edges dangerously close to default, marks a more concerted effort to curtail the funding.


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