German Bundesbank President Jens Weidmann on Thursday said capital controls in Greece should remain in place until a new bailout program has been agreed, adding that no further European Central Bank liquidity support should be given to its banks.
Speaking to an audience in Frankfurt, Jens Weidmann, who also sits on the European Central Bank's Governing Council, said it was up to euro zone countries rather than the ECB to resolve the Greek problem.
"The euro system should not increase the liquidity provision, and capital controls need to stay in force until an appropriate support package has been agreed ... and the solvency of both the Greek government and the Greek banking system has been ensured."
"Central banks need to show where their limits lie," he said. "It needs to be crystal clear that responsibility for further developments in Greece ... lies with the Greek government and the countries providing assistance - not the ECB Governing Council" Reuters reported Weidmann as saying.
It is not the first time Weidmann criticizes the mounting reliance of Greek banks on emergency central bank loans, “emergency liquidity assistance in Greece has been provided for a protracted period and has become the banks’ only source of funding.” Weidmann said in a speech in Frankfurt on late June.