Thursday

19th Sep 2019

Ombudsman asks ECB chief to quit secret bankers group

  • Draghi attended four closed-doors meetings with the G30 group since he became head of the ECB (Photo: Pixabay)

The EU Ombudsman has called on European Central Bank (ECB) top officials to stop participating in the Group of 30, a secretive international gathering of bankers.

In a set of recommendations published on Wednesday (17 January), Emily O'Reilly said that ECB president Mario Draghi should "suspend his membership for the remaining duration of his term", which ends in 2019.

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

  • Ombudsman O'Reilly: 'It is important to demonstrate to the public that there is a clear separation between the ECB and the finance industry' (Photo: European Union)



She added that "the ECB should seek to ensure that neither the next president of the ECB, nor any other member of ECB decision-making bodies, becomes a member of the G30."

"It would undoubtedly help reinforce public trust in the ECB," she argued.

The Ombudsman's recommendations follow a year-long investigation after Corporate Europe Observatory (CEO), a Brussels-based NGO, filed a complaint in November 2016.

CEO argued that ECB officials involvement in the G30 was incompatible with the institutions' independence, reputation and integrity.

In 2015, the NGO requested documents from the ECB over the institution's ethic bodies' proceedings on the G30.

It then considered that the replies from the ECB showed that "no precautionary measures have been taken" concerning ECB official's participation in G30 meetings.

The Group of 30 - formally named the Consultative Group on International Economic and Monetary Affairs - is a Washington-based organisation whose members include the heads of major private banks and central banks, as well as academics and international institutions officials.

It organises two closed-door meetings a year, as well as an international banking seminar that is open to external participants.

Members of this exclusive club are chosen by a Board of Trustees, of which only the chairman is known - Jacob A. Frenkel, the Chairman of the JPMorgan Chase International bank.

Draghi has attended four meetings - in 2012, 2013 and twice in 2015 - and one seminar - in 2012 - since he became ECB president, according to the bank's reply to the Ombudsman's questions.

After a first complaint by CEO in 2012, O'Reilly's predecessor Nikiforos Diamandouros said in 2013 that Draghi's participation in the G30 was not "incompatible with the independence, reputation and integrity of the ECB".


But since that decision, the ECB was tasked with a new mission, the supervision of EU banks, through the Single Supervision Mechanism. 

This, according to O'Reilly, makes the situation today "different from that of 2012".

The Ombudsman noted that "crucially, members of the G30 "also include representatives from a number of major banks either directly or indirectly supervised by the ECB".

'Clear separation'

She insisted that it was "important to demonstrate to the public that there is a clear separation between the ECB as supervisor and the finance industry which is affected by its decisions".

ECB rules "cannot fully remove the possible perception by some citizens that regulators and bankers meet in elite clubs behind closed doors and take decisions affecting the lives of millions of people," she said.

O'Reilly noted that Draghi is not a member of the SSM's executive body, the supervisory board, and that "there is no evidence that the G30 meetings could have directly influenced or have had an (adverse) impact on the ECB's supervisory tasks".

She pointed out however that "those holding public office must not be influenced, or even appear to be influenced, by private relationships".

As a result, she asked that neither the members of the SSM's supervisory board nor of the ECB's executive board become members of the G30.

She also asked that when they attend G30 non-member events, they should disclose the agendas of the meetings and non-confidential summaries of the discussions.

'Timely and positive decision'

O'Reilly now expects a reply from the ECB by 15 April.

The ECB said on Wednesday that it had "taken note of the Ombudsman's recommendation and will respond in due course".

In October, it told the Ombudsman that is considered that Draghi and other officials' attendance to G30 meetigns was "fully compatible with the independence, reputation and integrity of the ECB and, most importantly, that this does not entail any conflict of interest".

Corporate Europe Observatory, for its part, said that the Ombudsman's decision was "timely and very positive".

"Imbalanced policy consultation at the European Central Bank has made the institution vulnerable to the undue influence of financial industry interests," the NGO's Kenneth Haar said in a statement.

He said he hoped that the ECB will implement the recommendations "without hesitation", and added that "the next step will be to reform the advisory groups of the ECB, which our researcn has shown to be dominated by the financial industry."

ECB withheld information on 'flawed' bank supervision

The European Central Bank refused to provide important evidence when the Court of Auditors examined its management of the banking crisis. A court report said the system was substantial but had "flaws".

Investigation

The ECB: EU's 'bad bank' (for its employees)

An internal report finds 'lack of staff' and high 'burnout' levels at the European Central Bank in Frankfurt - the bank trusted with keeping the eurozone stable and secure.

Eurogroup starts process to pick new ECB chiefs

Eurozone finance ministers will pick who they recommend to become the European Central Bank vice-president - the choice is between their Spanish colleague Luis de Guindos, and the governor of the Central Bank of Ireland, Philip Lane.

Ombudsman insists Draghi leaves G30 bankers group

The European Ombudsman says that "maladministration" in the European Central Bank continues to exist as long as its president remains member of the secretive 'Group of Thirty'.

News in Brief

  1. Kovesi has 'sufficient majority' for prosecutor post
  2. France, Finland give UK ultimatum for Brexit plan
  3. Minsk talks bode ill for EU's peace summit on Ukraine
  4. Poll: Poland's nationalist rulers to win October election
  5. Irish lawyers clash with EU commission in Apple case
  6. NGOs take aim at EU smartphone pollution
  7. EU adds €100m to research and Erasmus budgets
  8. Ambassador: UK Poles should 'seriously consider' leaving

Column

These are the crunch issues for the 2019-2024 EU commission

These developments will largely determine who will be running the world in the coming decades and perhaps generations. If the Europeans can't find an answer over the five years, they will be toast. And we haven't even mentioned climate change.

Magazine

The changing of the guards in the EU in 2019

The four most powerful EU institutions - Commission, Parliament, Council and Central Bank will all have new leaders in the coming ten months. Here is an overview.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  2. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  3. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  4. Nordic Council of MinistersNo evidence that social media are harmful to young people
  5. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  6. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  7. Nordic Council of MinistersEducation gets refugees into work
  8. Counter BalanceSign the petition to help reform the EU’s Bank
  9. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  10. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  11. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  12. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat

Latest News

  1. France, Italy want 'automatic' distribution of migrants
  2. Europe's refugee policy is test of its true 'way of life'
  3. A new Commission for the one percent
  4. Juncker: No-deal Brexit 'palpable'
  5. Germany adopts blockchain strategy and says no to Libra
  6. Revanchist Russia continues to rewrite European history
  7. How EU trains discriminate against the disabled
  8. These are the crunch issues for the 2019-2024 EU commission

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Join EUobserver

Support quality EU news

Join us