ECB says EU use of Russian assets for Ukraine loans is a stretch

FRANKFURT, Dec 3 (Reuters) - The European Commission's proposal to use Russian central bank assets to extend reparations loans to Ukraine is a stretch from a legal and financial point of view, European Central Bank President Christine Lagarde said on Wednesday.

The European Commission presented EU member states with two options to give Ukraine 90 billion euros ($105 billion) for the next two years - use Russian frozen assets or borrow money on international markets.

Lagarde said the former option was "something that is stretched" and that "hopefully is in compliance with international law (and)...financial stability".

She said it was the ECB's job to flag these risks because a key cog in the European financial system, the clearing house Euroclear where the Russian assets are parked, and the region's very reputation were at stake.

(Reporting by Francesco Canepa; Editing by Andrew Cawthorne and Ed Osmond)