Cyprus Capital Curbs Won’t Stem Need to Tap ECB More, Weber Says

Cypriot capital controls may not prevent the country’s lenders from becoming more reliant on funding from the European Central Bank, UBS AG Chairman Axel Weber said.

Capital controls are “maybe a step to avoid a catastrophic exit from the euro which would have had much larger repercussions,” Weber said on Bloomberg Television’s “On the Move” with Francine Lacqua today in London. “A catastrophe has been averted, but the impact on the Cypriot economy is going to be huge” and “banks will become even more dependent on ECB liquidity because deposits will be largely drained.”