Sunday

24th Jul 2016

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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.

EU to tweak rules on Chinese 'dumping'

The EU Commission has tried to fudge the issue of whether China is a “market economy” amid efforts to protect European industry from cheap exports.

Court ruling puts Renzi bank plan in doubt

EU court ruling on bank bailouts has raised the likelihood of a political embarrassment for Renzi, months before a referendum puts his future and, potentially, Italy’s euro future on the line.

Stakeholders' Highlights

  1. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event Agenda for 2016
  2. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  3. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  4. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  5. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  6. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  7. Dialogue PlatformFethullah Gulen Calls for International Probe Into Turkey Coup Allegations
  8. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  9. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children
  10. Counter BalanceReport: Institutionalised Corruption in Romania's Third Largest Company
  11. Access NowEuropol Supports Encryption. We Can Relax Now… Right?
  12. GoogleLearn about Google's projects across Europe on Twitter @GoogleBrussels

Latest News

  1. Munich attack might not have been terrorism
  2. A very British (and Corbynite) coup
  3. Poland 'changing for the worse' for Muslims and refugees
  4. EU aims to lift visas on Turks despite purge
  5. ECB in ‘bail-out’ of scandal-tainted VW
  6. EU failed to learn lesson from Brexit, Poland says
  7. UK accord on EU workers 'crucial', France says
  8. EU and US take different lines on Turkey crackdown