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EU finance ministers' head urges ECB to study security risks of 500 euro banknote
February 12, 2016 / 9:32 AM / 2 years ago

EU finance ministers' head urges ECB to study security risks of 500 euro banknote

Luxembourg's Finance Minister Pierre Gramegna (L) talks with Belgian Finance Minister Johan Van Overtveldt (C) and Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem during a European Union finance ministers meeting in Brussels, Belgium, February 12, 2016. REUTERS/Yves Herman

BRUSSELS (Reuters) - The European Central Bank should make proposals on how to reduce security risks linked to the 500 euro note which can be used for the financing of terrorism, the head of euro zone finance ministers said on Friday.

Almost 30 percent of the more than 1 trillion euros (1 trillion pounds) of cash in circulation last year was hoarded in 500 euro notes, ECB data show.

The banknote is one of the most valuable worldwide, with a value more than five times higher than the largest U.S. equivalent currently in circulation, the $100 bill.

“We are going to ask the ECB to look at cash money and the accessibility of the 500 euro note,” Dutch Finance Minister Jeroen Dijsselbloem told reporters ahead of a meeting of EU finance ministers in Brussels.

“There are risks that large notes and large cash amounts can be easily used for terrorism financing,” Dijsselbloem, who is permanent head of euro zone finance ministers, said.

Finnish Finance Minister Alexander Stubb (L) talks with Dutch Finance Minister and Eurogroup President Jeroen Dijsselbloem during a European Union finance ministers meeting in Brussels, Belgium, February 12, 2016. REUTERS/Yves Herman

The request for a probe on the 500 euro note comes amid an EU clampdown on all means of payment that may be used to finance terrorist acts. It was triggered by the attacks in Paris last November by Islamic State militants that killed 130 people.

The European Commission, the EU executive arm, proposed last week to increase controls on prepaid payment cards, virtual currencies such as bitcoin and other possible source of financing for terrorist organisations.

Eurogroup President Jeroen Dijsselbloem arrives at a European Union finance ministers meeting in Brussels, Belgium, January 15, 2016. REUTERS/Yves Herman

It also warned about the risks of 500 euro notes, mulling possible ceilings on cash payments.

The ECB is in charge of making decisions on the eruo banknotes in circulation.

The 500 euro note has raised concerns also in relation to fraud and corruption. In an interview in January, the top EU anti-fraud official called for the banknote to be withdrawn.

When euro notes and coins began to circulate in 2002, Germany was among the main supporters of having a 500 euro banknote to match the value of its 1,000-mark note, and cater to Germans’ traditional preference for cash over electronic money.

Editing by Jeremy Gaunt.

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