European Central Bank staff have prepared a proposal to increase the haircut on the security that Greek banks offer in return for emergency liquidity, Bloomberg reported on Tuesday, citing people with knowledge of the discussions.

By increasing this haircut, it would effectively reduce the value of security that Greek banks can offer and consequently the amount of Emergency Liquidity Assistance they can draw down.

Bloomberg reported that the measure had not been formally discussed by the ECB's policy-setting Governing Council. The ECB declined to comment.