(Corrects quote in line 12 of June 4 story to show ECB has no competence rather than no complaints on tax issues)
SEOUL, June 4 (Reuters) - The European Central Bank will voice its concerns to governments if the planned tax on financial transactions causes distortions in European financial markets, Executive Board member Benoit Coeure said.
The ECB had no objections to the planned tax as this is not part of the central bank's mandate, Coeure told journalists on the sidelines of a conference in Seoul on Monday. His comments were available for release on Tuesday.
"(If) we find the project can induce distortion on funding markets and in money markets in Europe, then we will stand ready to engage governments to discuss alternative measures but again, no objection on principle - the ECB does not have a competence on tax issues," Coeure said.
Germany and 10 other European Union member countries have agreed a tax on trading in financial markets, which they hope to launch in January 2014 to cover part of the cost of the financial crisis.
But officials working on the project told Reuters last week that the countries were set to drastically scale back the levy and delay its full roll-out for years.
Coeure said last month the ECB was willing to offer help in setting up the tax to ensure the levy did not destabilise financial markets.
His German colleague, Bundesbank President and ECB Governing Council member Jens Weidmann, had raised concern in April that the tax could impair the market for repurchase agreements, which is important for liquidity.
Coeure said he sees such a tax having potential merits.
"I believe the tax can be good if it is well designed. But this is just my personal view," he said. (Reporting by Christine Kim, writing by Eva Kuehnen; Editing by Toby Chopra)