Friday

20th May 2022

Revolving doors at the EU commission's finance unit

  • Links between the EU Commission and the financial sector go "far deeper than a mere reliance on the industry's expertise," says Corporate Europe Observatory (Photo: European Commission)

The European Commission's unit for banking and financial regulation has a "revolving door problem", with a high proportion of top officials joining companies they were overseeing, according to an NGO report.

"Out of the five former directors between 2008-2017 who have now quit the Commission, four went to work for companies they once oversaw or lobby firms that represent them," Corporate Europe Observatory (CEO), a transparency organisation, noted in a report published on Thursday (12 April).

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • Faull joined Brunswick in 2017 (Photo: europeanbusinesssummit)

The research, done with Yiorgos Vassalos, a PhD student and teaching assistant at the French University of Lille, focuses on the years when the commission addressed the financial crisis and was tasked with increasing regulation of the sector.

It shows that one of the three heads of unit who worked on financial regulation between 2008 and 2017 and have now left the commission, went on to work for the financial industry.

The reports mentions the case of Jonathan Faull, a respected commission official who ended his career as head of the UK task force ahead of the Brexit referendum.

Faull, who was head of the DG Fisma - the commission's directorate-general for financial stability, financial services and capital markets union - from 2010 to 2015, joined Brunswick, a lobby consultancy, after he retired from the commission in 2017

The research also points out that six out of twenty-seven heads of units and seven out of a total of twenty-two deputy heads of units in this period have worked for the financial industry before joining the EU executive.

"This goes far deeper than a mere reliance on the industry's expertise," CEO's report says. "It is not a stretch to say that directors may well have this next step in their careers in the back of their minds while still in public office."

Window-dressing policies?

"If this is the case," the NGO asks: "could this incite them to promote window-dressing policies, rather than risk any measure that might upset their potential future employers?"

The revolving doors for top civil servants at the DG Fisma - the commission's directorate-general for financial stability, financial services and capital markets union - follows a trend also set by commissioner themselves.

Vassalos and CEO note that two out of the three EU commissioners in charge of finance between 2008 and 2017 "went to work for financial interests after the end of their mandate".

Ireland's Charlie McCreevy, who served from 2004 to 2010, became "the first former commissioner in history to be given the red light" by the institution when he tried to create a bank when he left office.

One week after the end of the so-called cooling off period, when former commissioners have to report over their job plans, McCreevy was hired by Bank New York Mellon. He later also joined other financial firms such as Sentenial, World Spreads and Celsius Funds.

Another commissioner, the UK's Jonathan Hill, was former lobbyist when he joined the EU executive.

After his resignation following the Brexit vote in 2016, he joined Freshfields, "a law firm that lobbies EU Institutions for Lloyds, London Stock Exchange, and the Futures Industry Association, among others," according to the report.

The third commissioner in charge of financial services during the period is Michel Barnier, a French politician who "didn't go through the revolving doors after his mandate" and is now the EU Brexit negotiator.

Social identification

These cases, as well as others such as Nelly Kroes' move to Bank of America Merril Lynch, or Jose Manuel Barroso's to Goldman Sachs, "indicate the revolving door problem exists at the level of the highest political leadership," CEO insists.

This, it adds, surely gives a clear signal to DG FISMA's staff that the revolving door is a normal part of their careers, if not a characteristic of the most successful and high-level careers."

Corporate Europe Observatory calls on the commission to "protect itself from conflicts of interest."

It says the institution should "act to limit the revolving door, and adopt strict conflict of interest rules, cooling off periods, and post-career sanctions that break the social identification of its financial regulation department with the strongest firms it is supposed to be regulating".

Magazine

Barrosogate and the revolt of public opinion

Just days after Britain's vote to leave the EU, the bloc was rocked by the news that commission ex-president, Jose Manuel Barroso, had landed a top job with Goldman Sachs.

Commission sticks to its line on Barroso case

In a letter to a coalition of transparency NGOs, the EU executive has repeated that a meeting between its former boss - now working for Goldman Sachs - and the current vice president was "fully in line" with the rules.

EU commission on defensive over 'revolving doors'

The European Commission rubber-stamped over 99 percent requests by officials to take on jobs in the private sector, posing ethical questions in light of known examples where conflicts of interests appear to be clear cut.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Opinion

Georgia, Moldova, Ukraine - the case for granting EU candidacy

Granting EU candidacy status to Georgia, Moldova and Ukraine will firmly anchor their ties with Brussels — and enable the EU to secure its place in the Black Sea region, connecting Europe to China and energy-rich Central Asia, bypassing Russia.

Opinion

The EU Parliament Covid inquiry: the questions MEPs must ask

A basic lack of transparency around the EU's vaccines procurement negotiations has prevented effective public and parliamentary scrutiny. It has also made it impossible to answer some of the key questions we put forward here.

News in Brief

  1. Half of Gazprom's clients have opened rouble accounts
  2. Macron seeks 'quick' EU answer on Moldova application
  3. German chancellor to tour Western Balkans
  4. UN: more than 8,000 civilians killed or injured in Ukraine
  5. EU agrees new minimum gas storage target
  6. EU justice agency to have more roles on war crimes
  7. More than 50,000 Ukrainians refused entry into EU in 2021
  8. Germany open to EU treaty change 'if required'

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic delegation visits Nordic Bridges in Canada
  2. Nordic Council of MinistersClear to proceed - green shipping corridors in the Nordic Region
  3. Nordic Council of MinistersNordic ministers agree on international climate commitments
  4. UNESDA - SOFT DRINKS EUROPEEfficient waste collection schemes, closed-loop recycling and access to recycled content are crucial to transition to a circular economy in Europe
  5. UiPathNo digital future for the EU without Intelligent Automation? Online briefing Link

Latest News

  1. MEPs urge sanctioning the likes of ex-chancellor Schröder
  2. MEPs call for a more forceful EU response to Kremlin gas cut
  3. Catalan leader slams Pegasus use: 'Perhaps I'm still spied on'
  4. More EU teams needed to prosecute Ukraine war crimes
  5. French EU presidency struggling on asylum reforms
  6. EU states warn of looming food-price crisis
  7. Ultraconservatives in Putin's shadow
  8. Nordic Bridges unveil latest highlights of Spring programme

Join EUobserver

Support quality EU news

Join us