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5th Feb 2023

EU public lacks voice on banking laws

  • Even bank lobbyists admit the general public takes little interest (Photo: Dave Collier)

The complexity of financial laws is “an obstacle” that prevents the “man in the street” from influencing the lawmaking process, a high-ranking civil servant in the European Commission said on Wednesday (8 December).

“The complexity of EU law is an obstacle for civil society to take its fair share in the discussion,” said the commission's Eric Ducoulombier.

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  • The 2008 crisis prompted rare street protests against big banks and EU decisions (Photo: Valentina Pop)

Ducoulombier heads a unit responsible for inter-institutional relations, planning, and stakeholders’ relations in the commission's financial services branch.

He spoke at a conference about how civil society can make its voice heard in the sector.

“We are not fully there yet, I fully admit this,” said Ducoulombier, adding that there is “asymmetry” between those representing the public interest and those representing the interests of financial firms.

Ducoulombier’s remarks underlined the findings of a report by Finance Watch, an NGO in Brussels.

Finance Watch held eight workshops over the past two years in which both private citizens and civil society groups said they “did not feel able” to influence regulation of big banks.

Complex, expensive

The two main reasons were complexity and lack of resources.

“Banking regulation both internationally and nationally is dominated by technical and expert rule-making and enforcement,” the report said.

“This tends to block the public from participating and representing their own interests in the domain of bank regulation.”

The report said that EU “consultations” with stakeholders, including the general public, allow for tweaks on details, but not on core ideas.

It said that by the time the public is consulted, the “scope [of the regulations] is already defined” by technical experts.

On many occasions, the scope is set by international bodies even further away from public scrutiny and merely implemented by the EU.

On lack of resources, several potential participants did not even have the time to go the Finance Watch workshops.

They said “they simply don't have the time and/or staff to dedicate to a full-day workshop on banking, a non-core, non-funded issue for them”.

Public interest

According to its 2015 annual report, Finance Watch itself had a budget of €1.5 million.

By contrast, the Corporate Europe Observatory, a pro-transparency NGO in Brussels, recently estimated that the financial sector spends €120 million per year on lobbying in Brussels and employs 1,700 people to do it.

Part of the problem is that banking and finance is not as catchy a topic as, for instance, environmental affairs.

The 2008 financial crisis prompted rare street protests against big banks.

The EU bailouts and austerity that ensued also fuelled eurosceptic movements, many of which continue to flourish.

But environmental NGOs, such as Greenpeace International, find it much easier to mobilise public support. Greenpeace International raises over €300 million a year in grants and donations. Finance Watch's last year raised only half a million from private donors, foundations and members.

Even the lesser known Friends of the Earth Europe had an income of €5 million last year.

Banks themselves recognise that there is a lack of public awareness on what they do.

“It is so hard to get people interested in finance,” said Wim Mijs, who heads the European Banking Federation, a lobby group in the EU capital.

The EU has tried to help fill this gap.

Finance Watch itself was born in 2011 out of a concern by MEPs that there should be a civil society group focusing on the public interest in financial legislation.

Over half of Finance Watch's budget comes from EU funds, and last summer the European Commission proposed to provide up to €6 million to Finance Watch and a second NGO, Better Finance, in the 2017-2020 period.

The EU parliament is expected to vote on the commission proposal in March.

Ducoulombier, on Wednesday, admitted that the sum is a modest one, but said it would still help to redress the balance.

“You could say: '€6 million, compared to the firing power [of the financial sector lobby] this is peanuts'. Maybe,” he said.

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