Thursday

20th Jul 2017

ECB chief under scrutiny for alleged conflict of interest

The EU ombudsman has launched an investigation into an alleged conflict of interest by European Central Bank (ECB) chief Mario Draghi due to his membership in a club of top bankers, the Group of Thirty (G30).

"We received a complaint and sent a letter to the ECB. Now we are waiting for a reply," Gundi Gadesmann, spokeswoman for EU ombudsman Nikiforos Diamandouros was quoted as saying by Reuters.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The ECB also confirmed it received a request from the ombudsman and will respond in due time, while rejecting the claim that membership in the G30 is against the bank's ethics code.

The complaint was filed last month by Corporate Europe Observatory, a Brussels-based transparency group, which criticised Draghi's membership in a bank lobby group whose declared statement is to influence the debate on regulation of the financial sector.

"There's the opaque nature of the group's activities and of its membership. There is no way for the public to know the details of the President's involvement, since the meetings of the members are confidential. Information on the discussions that take place, and whether the members commit to certain lines of action is not accessible to the public," the complaint says.

"In our view, given the above, the group has the characteristics of a lobbying vehicle for private financial interests. It is an important interface between the private banking sector and central banks, and allows some of the biggest private banks in the world to exert a direct influence on the top executives of the most important central banks, including the European Central Bank."

"We believe that any president of the ECB has to make it absolutely clear that he or she is not under the influence of the financial lobby at any time, and has to ensure that he is not attached to a forum or process that could jeopardise his independence or give rise to conflicts of interest."

With the ECB in line to receive greater powers of scrutiny over banks in the eurozone, independence from the private banking sector is becoming more important, the group added.

Draghi already came under fire shortly after his ECB appointment for his past as a manager at US investment bank Goldman Sachs, where he oversaw European operations which included debt swaps with Greece that allowed Athens to cover up its real deficit.

Later on, in 2010, the deficit was too big to handle and Greece became the first euro country to ask for a bailout.

Bloomberg news agency has also filed a case at the EU court in Luxembourg against the ECB for its refusal to disclose internal documents which refer to the Goldman Sachs-Greece operations.

At a hearing in June, the ECB said it decided not to release the documents in 2010 when Bloomberg first asked for them, because it would have "fueled negative perceptions about Greece's ability to honor its debt."

Greece earlier this year was unable to honour its debt and signed up to a 'voluntary' debt restructuring in which banks slashed half of its obligations.

"Markets will perform better when they have transparency ... The question is who knew what; and when did they know it?" Timothy Pitt-Payne, a lawyer for Bloomberg News, told the court in June.

Investigation

The European Central Bank: a hamstrung firefighter

The European Central Bank is an important firefighter in the euro-crisis. But increasingly divergent eurozone economies are limiting the effects of its policies and democratic scrutiny remains an issue.

Investigation

Big banks: From Greek bailout to Hamlet's castle

A lobby for the world's biggest banks - the International Institute of Finance - became a key EU player when it negotiated the debt cut on Greece's second bailout. Its world of rented castles and sopranos shows losses were bearable.

Greece to get €7.7bn loan next week

The ESM, the eurozone emergency fund, agreed on Friday to unblock a new tranche of aid as part of the bailout programme agreed upon in 2015.

EU and Japan agree on free trade

Japanese prime minister and EU leaders to endorse major trade deal on Thursday in anti-protectionist message to Trump.

Opinion

Greece needs a new plan

Two years into its third bailout, Greece needs to combine the necessary fiscal targets with a new vision. This can be done in the context of the ongoing industrial revolution.

Opinion

Ceta and pesticides: A citizens' rights issue

The trade agreement with Canada will begin to apply on 21 September. But there is still a potential conflict on the right to data protection vs. the right to access information.

News in Brief

  1. Polish parliament adopts controversial justice reform
  2. GMO opt-out plan unlikely to go anywhere in 2017
  3. Slovak PM threatens to boycott inferior food
  4. France takes Google's 'right to be forgotten' to EU court
  5. Turkey accuses German companies of supporting terror
  6. Israel's Netanyahu caught calling EU 'crazy'
  7. UK does not collect enough data to expel EU nationals
  8. Polish president threatens to veto justice reform

Stakeholders' Highlights

  1. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  2. ACCAAnnounces Belt & Road Research at Shanghai Conference
  3. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  4. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  5. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  6. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  7. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  8. Counter BalanceOut for Summer Episode 1: How the EIB Sweeps a Development Fiasco Under the Rug
  9. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  10. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  11. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  12. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School

Latest News

  1. Polish parliament steps up showdown with EU
  2. EU urges UK to clarify its Brexit positions
  3. Law expert: direct EU powers have become too complicated
  4. Winter is here for Spitzenkandidat, but he'll survive
  5. Mafia money pollutes the EU economy
  6. Central Europe should be wary of Brexit stopping
  7. Poland's 'July coup' and what it means for the judiciary
  8. Commission: clean up diesel cars, or EU agency inevitable