ECB Weidmann: Freeze on Emergency Loans To Greece Should Continue Until Deal Reached

        By Todd Buell
        FRANKFURT--European Central Bank Governing Council member Jens Weidmann said Thursday that the ECB should continue to freeze emergency loans to Greece and capital controls should stay in place until the embattled country can reach a deal with its international creditors.
        "The Eurosystem should not increase the liquidity provision, and capital controls need to stay in force until an appropriate support package has been agreed by all parties and the solvency of both the Greek government and the Greek banking system has been ensured," Mr. Weidmann, who also heads Germany's Bundesbank, said in prepared remarks for a conference in Frankfurt.
        The comments come a day after the ECB decided again to leave the volume of emergency lending assistance available to Greek banks unchanged at around EUR89 billion ($99 billion), as the clock ticks on Greece to reach a deal with its international creditors on a third bailout.
        The decision was made at a conference call of the ECB's governing council. It came two days after the ECB raised the amount of collateral that Greek banks must post to obtain the loans. Though this had no practical effect--because banks still had sufficient collateral for their outstanding loans--the move raised pressure on the Greek government to reach a deal with its international creditors.
        Late last month, Mr. Weidmann also criticized Greek banks' reliance on the emergency liquidity assistance that the Greek central bank, with the approval of the ECB, offers Greek banks that have been effectively locked out of regular ECB loan operations
        Write to Todd Buell at todd.buell@wsj.com
        (END) Dow Jones Newswires
        July 09, 2015 03:11 ET (07:11 GMT)

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