Report: Bundesbank Head Warns ECB

Published March 1, 2012 10:54AM (EST)

FRANKFURT, Germany (AP) — The head of Germany's Bundesbank is warning the European Central Bank about risks involved in its massive credit offering to banks.

Germany's Frankfurter Allgemeine Zeitung says Bundesbank head Jens Weidmann wrote a letter warning about the risks of looser rules on collateral for the loans.

The looser rules meant more banks could borrow money. But Weidmann is warning that the practice exposes the ECB and national central banks to more risk.

The ECB lent euro529.5 billion to 800 banks Wednesday to steady the system against the eurozone debt crisis.

By Salon Staff

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