Tuesday

24th Apr 2018

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • 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.

News in Brief

  1. Commission will 'not shy away' from Malta killing repercussions
  2. EU Commission opens probe on Alitalia state loan
  3. Paris suspect given 20-year sentence for Brussels shoot-out
  4. Merkel and Pena Nieto praise EU-Mexico trade agreement
  5. Nahles elected new leader of Germany's SPD
  6. Report: EU budget to refocus on South
  7. Audit office: Brexit 'divorce' bill could be billions higher
  8. MEPs urge better protection for journalists

Stakeholders' Highlights

  1. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  2. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  3. Mission of China to the EUProgress on China-EU Cooperation
  4. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  5. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  6. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  7. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  8. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  9. UNICEFCalls for the Protection of Children in the Gaza Strip
  10. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  11. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  12. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations

Latest News

  1. Hungary activists defiant after 'Soros Mercenaries' attack
  2. European Commission proposes whistleblower protection law
  3. Secrecy of VW fraud report 'unacceptable', says MEP
  4. 'Strong suspicion' of corruption in Council of Europe assembly
  5. France tightens immigration law, sparking division
  6. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  7. Whistleblowers, Syria and digital revolution This WEEK
  8. MEP friendship groups offer 'backdoor' for pariah regimes

Stakeholders' Highlights

  1. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  2. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  3. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia
  4. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  5. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  6. European Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  7. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  8. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  9. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  10. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  11. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  12. Martens CentreEuropean Defence Union: Time to Aim High?