Saturday

28th May 2022

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

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

  • 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.

EU Commission extends borrowing curbs in 2023

The European Commission on Monday proposed to extend suspension of fiscal borrowing rule in 2023 — but advised prudence amid already rising real interest rates.

Commission grilled on RePowerEU €210bn pricetag

EU leaders unveiled a €210bn strategy aiming to cut Russian gas out of the European energy equation before 2027 and by two-thirds before the end of the year — but questions remain on how it is to be financed.

MEPs raise ambition on EU carbon market reform

MEPs on the environment committee agreed on reform of the European carbon market — including expanding it to buildings and transport. They also want to extend the scope of the carbon border tax, and phase out free permits by 2030.

EU countries rush to expand gas import capacity

EU plans to quit Russian gas and replace it, in part, by importing overseas liquified natural gas has lead to a flurry of new gas projects — which threaten to lock in unnecessary gas use for decades.

Russia's war stifles EU pandemic recovery

The impact of Russia's war in Ukraine is being felt throughout the EU and the eurozone. The European Commission has downgraded its economic forecast to 2.7-percent growth this year.

Commission grilled on RePowerEU €210bn pricetag

EU leaders unveiled a €210bn strategy aiming to cut Russian gas out of the European energy equation before 2027 and by two-thirds before the end of the year — but questions remain on how it is to be financed.

News in Brief

  1. Dutch journalists sue EU over banned Russia TV channels
  2. EU holding €23bn of Russian bank reserves
  3. Russia speeds up passport process in occupied Ukraine
  4. Palestinian civil society denounce Metsola's Israel visit
  5. Johnson refuses to resign after Downing Street parties report
  6. EU border police has over 2,000 agents deployed
  7. Dutch tax authorities to admit to institutional racism
  8. Rutte calls for EU pension and labour reforms

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. EU summit will be 'unwavering' on arms for Ukraine
  2. Orbán's new state of emergency under fire
  3. EU parliament prevaricates on barring Russian lobbyists
  4. Ukraine lawyer enlists EU watchdog against Russian oil
  5. Right of Reply: Hungarian government
  6. When Reagan met Gorbachev — a history lesson for Putin
  7. Orbán oil veto to deface EU summit on Ukraine
  8. France aims for EU minimum-tax deal in June

Join EUobserver

Support quality EU news

Join us