CESR was the predecessor of pan-European market watchdog the European Securities and Markets Authority (ESMA). Whilst ESMA is an EU body, and the legal successor of CESR since its creation in January 2011, and is therefore governed by the revolving door rules in the Staff Regulations, CESR was not an EU body. CESR was an association under French law, which does not generally require approval from employers when employees take up new external positions. So no revolving door restrictions placed on Eddy Wymeersch, who in September 2012 started working for the Association for Financial Markets in Europe (AFME), one of the biggest finance industry lobby platforms.
According to Gaёl de Boissard, the chairman of AFME, the financial lobby group Wymeersch now works for, “Europe’s capital markets are experiencing unprecedented levels of regulatory change and we are delighted to appoint someone with Eddy Wymeersch’s enormous experience of the financial markets to our Board. His expertise and understanding of the role of European policymakers, in particular, will be invaluable to us as an advisor.”
However, according to Wymeersch, “there is no overlap between the different activities, as my activity in AFME will deal with subjects that were not on the agenda when I was in office” (email to CEO, 28/09/12).
Based on the Markets in Financial Instruments Directive (MiFID) however, it is not clear that this is the case.
ESME's archive page for MiFID states that it includes documents pertaining to “all CESR’s work to provide technical advice to assist the European Commission in the development of the proposals for a MiFID Directive... and to develop convergent implementation of MiFID until April 2010.” Of the 157 documents listed, over 80 include CESR in their title. Clearly, MiFID was on the agenda of CESR, and as many of these documents date from between 2007 and 2010, when Wymeersch was in office, MiFID was evidently on the agenda of CESR whilst it was under Wymeersch's leadership.
On the side of the revolving door, AFME's website lists 155 documents relating to MiFID, as recent as September 2012, and at least as far back as the time when Mr Wymeersch was chair of CESR, in June 2010. One is therefore led to conclude that there is overlap between CESR and AFME on MiFID, the main piece of financial market architecture in the EU.
Wymeersch's trip through the revolving door does not break any existing rules, because he left CESR in July 2010, before it became ESMA, and in any case, he joined AFME just over 2 years after the notification period stipulated in the Staff Regulations would have ended. Nonetheless, it still causes concern over the disproportionate influence of profit-based, rather than public-good driven, interests unduly influencing law-making, when the head of the EU's financial regulatory body switches sides to the biggest anti-regulation financial lobby group in Europe.
To illustrate this, one can look at a recent AFME press release, which states that AFME “do not believe that further changes to the structure of the banking industry are necessary or will contribute to Europe’s economic growth”. This clearly demonstrates AFME's commitment to the status quo - minimal regulation with maximum profit and enormous risk borne by the rest of society – the very opposite of the public interest in the wake of a chain reaction of bank collapse and bail out.
Similar case on CESR and ESME, detailed at asktheeu.org
Email communication between CEO and Mr Wymeersch, September 2012
Websites accessed October 2012
“The close ties between regulator and regulated in the financial industry, and the reluctance of the latter to embrace far-reaching structural change, have been one of the main contributors to repeated financial crises and consequent social crises. It is therefore of concern to CEO to see the highest level of a European market regulatory body switching sides to one of the biggest lobby efforts against financial regulation. No rules were broken in this case, as CESR, unlike it's successor ESME, was not governed by the Staff Regulations, but this only serves to illustrate why such loopholes should be closed.”