Thursday

13th Dec 2018

Commission finance experts same bankers that caused crisis, says report

The vast majority of experts advising the European Commission on greater financial regulation are drawn from the same institutions that helped cause the crisis, claims a new report published on Thursday (5 November).

The document, A captive Commission - the role of the financial industry in shaping EU regulation, accuses the EU executive of listening almost exclusively to the finance industry both before and after the onset of the financial crisis over a year ago.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • London's Canary Wharf: The commission is accused of taking advice from the very people who caused the problem in the first place (Photo: Malabarista Lunar)

Its authors, the Alliance for Lobbying Transparency and Ethics Regulation (Alter-EU), a coalition of some 160 civil society groups, say the commission continues to draw insufficiently from the considerable expertise to be found in academia and civil society groups.

"The commission only seems to be interested in listening to the advice of the finance industry, rather than acting in the interests of society," said Paul de Clerck, a member of ALTER-EU's steering committee.

Mr de Clerck is also critical of the legislative proposals put forward by the commission in September and currently being analysed by the European Parliament's economic committee and member state governments.

"The commission tells us they are tightening the rules but in reality their proposals still leave many loopholes. If the commission wants to restore confidence in our financial systems, it must break free of this stranglehold of partial advice," he says.

De Larosiere Group

The draft legislation draws extensively on a February report by a high-level group set up by European Commission President Jose Manuel Barroso last October, whose board almost immediately received criticism over its make-up.

FIN-USE, a group of experts in consumer protection and small businesses that also advises the commission, wrote a letter to Mr Barroso describing the Larosiere group members as "all eminent, respected members of the financial establishment."

"However, that is the very point – they are members of the 'establishment' and none could be considered dedicated user representatives," reads the letter.

Mr Larosiere himself is an advisor to French bank BNP Paribas, while other board members also have close links to large financial institutions implicated in the crisis including Lehman Brothers (Rainer Masera), Goldman Sachs (Otmar Issing) and CitiGroup (Onno Ruding).

"A fifth, Callum McCarthy, was the head of the UK Financial Services Authority, which had been described as systematically failing during the crisis. Another member, Leszek Balcerowicz, is well-known for his opposition to regulation," says the report.

Unfair accusations?

In response, the Commission says it is unfair to concentrate solely on the financial sector, arguing that a look at a broad cross section of the EU's many expert groups reveals a balanced showing of representatives from NGOs, consumer groups, and civil society in general as well as industry officials.

Alter-EU contests the suggestion of overall balance.

"The commission hasn't provided us with any evidence that what they are saying is actually backed up by figures," Mr de Clerck told this website.

On the question of sourcing financial advice from those implicated in the crisis, the commission says many of its advisors were among those to first sound the alarm bell.

The EU executive adds that the complicated nature of financial regulation makes it imperative to seek advice from established financial figures.

"If you want financial advice you don't ask a baker," one official told EUobserver.

EU finance ministers will meet next Tuesday in Brussels to discuss the Commission's draft proposals that call for a European risk board and three supervisory authorities to be set up.

In a sign of the extensive dogfight still to come, the UK threatened this week to veto the planned overhaul of EU financial regulation if further safeguards against EU interference in national financial affairs are not added.

"There can be no interventions that have fiscal consequences for individual nations," Paul Myners, the UK City minister, told the country's treasury committee.

Greens boycott EU-Morocco vote after lobbying expose

EUobserver has exposed Moroccan lobbying at the European Parliament, prompting a probe to be launched against several MEPs. The Greens have now decided to boycott next week's Morocco trade vote in protest, saying the lobbying investigation must be finished first.

News in Brief

  1. Hungary votes to create new court overseen by government
  2. Polish PM calls confidence vote in EU judicial clash
  3. MEPs urge Russia to free Ukrainian prisoners
  4. No renegotiation of Brexit deal, MEPs say
  5. Italy to spend less than EU feared: report
  6. May: new leader would have to delay or rescind Brexit
  7. Brexit chaos as Tory MPs to vote on May's leadership
  8. EU set to spend 3.2 percent more in 2019

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. EU awaits May's future, insists on no renegotiation
  2. Deja vu: Bulgaria pipeline to face EU scrutiny
  3. MEPs and EU staff hid from Strasbourg gunman
  4. 'Trumped Up': The curious case of Babis' conflicts of interest
  5. EU rules out Brexit changes, but could help May
  6. Lead MEP on Morocco resigns as her report passes
  7. UN text not yet ready for ministers, says EU climate czar
  8. Russian propaganda prompts alarm in Ukraine and France

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us