EU Ombudsman's decision deepens ECB unaccountability
In a decision published today, following a complaint filed by Corporate Europe Observatory (CEO), the EU Ombudsman concludes that the European Central Bank's (ECB) President Mario Draghi's membership of the lobby Group of Thirty does not violate the ethics rules of the ECB. Corporate Europe Observatory warns that this decision risks consolidating and even deepening the lack of accountability of the ECB.
In its complaint, CEO stressed that the Group of Thirty (G30) is not a neutral think tank, as the European Central Bank (ECB) claims, but has served as an important tool for big private banks such as Goldman Sachs and JPMorgan Chase to defend their interests. It played a major role in creating a climate of 'hands-off' regulation that led to the financial disaster in 2008. The Ombudsman does not address the specific examples put forward in the complaint and documented with academic studies, but maintains that the fact that there is participation and financing from central banks makes working with the group unproblematic for the ECB.
“Setting up a public-private elite forum like the Group of Thirty has proven to be a very effective way for financial corporations to influence regulators and decision makers. There is a real risk that the ECB will see the Ombudsman's decision as a carte-blanche to work with financial lobbyists via bodies like this G30”, warned CEO's Kenneth Haar.
Part of CEO's complaint addresses the fact that the meetings of the G30 are confidential, which makes it impossible for citizens to hold the ECB President accountable for his activities in the G30. The Ombudsman however sees no reason to object to this, and instead stresses that he relies on the ECB itself to prevent conflicts of interest and undue influence.
Although the Ombudsman makes some suggestions to the ECB, such as a call to improve its communication with the public, CEO believes the implications of this case are serious, particularly in view of the increasing role of the ECB in financial regulation. But also in light of other recent decisions on the ECB, notably the Bloomberg case, in which the European Court of Justice sided with ECB, agreeing it could define documents related to the financial crisis as 'secret'.
CEO considers that current EU rules on accountability and conflicts of interest are clearly inadequate and leave the ECB operating beyond any serious democratic scrutiny.
“It is deeply disturbing that while the European Central Bank is taking on an increasingly important role in regulating financial markets, its President is privately associating with the very same lobbyists of big banks and financial institutions that he is supposed to be regulating”, stated Kenneth Haar.
-A quick overview of the case, including links to documents, can be viewed at http://corporateeurope.org/blog/draghi-and-group-thirty-intro
-An in-depth version of Corporate Europe Observatory’s response to the ECB’s comments to the case can be viewed at http://corporateeurope.org/news/president-and-private-finance-club