By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Pierre Wunsch on Friday said he opposed raising banks’ minimum reserve requirement while the reserves remained unremunerated, arguing that this would amount to a form of taxation.

“As a matter of principle, I am not in favor of raising the minimum reserve requirement,” Wunsch, who heads the National Bank of Belgium, told German business daily Handelsblatt.

“Combined with the absence of remuneration, that amounts to a form of taxation,” he said.

Wunsch warned that increasing the requirement could make the ECB appear to be exercising fiscal authority over the banking sector.

“It is a quasi-fiscal instrument that we must handle with caution,” he said.

Handelsblatt reported, citing informed sources, that other members of the Governing Council also had reservations about an increase.