Posen: Greece is not the issue, it's banks

The outgoing Bank of England policymaker Adam Posen has urged European leaders to pump billions more into the region's banks to withstand the debt crisis.

At a conference in Tokyo, he blamed European governments for not implementing necessary steps to strengthen them and warned that governments should not be afraid to nationalise banks.

Mr Posen, who is quitting the Bank's Monetary Policy Committee in August, said: "The source of our current problem is not Greece. The source of our current problems in the euro area are the various financial exposures that we all have in the interbank market that have not yet been resolved because institutions remain insufficiently capitalised and insufficiently disciplined."