Ombudsman calls for ECB chief to quit global bankers’ club
The EU ombudsman has called on the president of the European Central Bank to stop taking part in the ‘Group of Thirty’ – a global alliance of banking leaders working on economic and financial issues.
Mario Draghi’s membership of the group, which meets behind closed doors, could damage public confidence in the independence of the ECB, according to a report published by European ombudsman Emily O’Reilly after a one-year inquiry.
The ECB should ensure that Draghi suspends his membership for the remainder of his term, the report says, and that neither its next president nor any other member of its decision-making bodies joins the group.
Don’t get too close
The Group of Thirty comprises 30 senior bankers, central bankers and academics, who hold biannual meetings on global financial issues in private without publishing an agenda or minutes. It also hosts an annual central banking seminar for invited guests.
Launching the report last week, O’Reilly said: “The ECB can of course interact with the G30, as it does with any other stakeholder, in order to improve policy-making by listening to a broad range of viewpoints.
“However, these interactions should be as transparent as possible and not based on membership, which, with that implied closer relationship, undermines the very positive transparency steps the ECB has made in recent years.”
Transparency required
Mario Draghi, president of the European Central Bank (Image courtesy: European Central Bank).
The ECB should send representatives to G30 events only if the bank publishes the agendas and summaries of discussions held at the meetings, she added.
Draghi has been a member of the Washington-based group since 2006, five years before he became president of the ECB – where his term ends in 2019. He sits alongside top international bankers including Mark Carney, governor of the Bank of England; Zhou Xiaochuan, governor of the People’s Bank of China; and Ben Bernanke, former chairman of the US Federal Reserve System.
The G30 also includes leaders of banks that are directly supervised by the ECB, such as Germany’s Bayerische Landesbank and, until recently, Spanish bank Santander, as well as those that are indirectly supervised – including Switzerland’s UBS and Credit Suisse, which have several subsidiaries in the euro zone.
‘Maladministration’
“The ECB president’s membership of the G30 could give rise to a public perception that the independence of the ECB could be compromised,” the report says. “For the ECB to allow this perception to arise over several years constitutes maladministration on its part.”
Emily O’Reilly, the European Ombudsman (Image courtesy: Katarzyna Czerwinska).
The perception was reinforced by the “secrecy” that surrounded G30 membership, including how members were chosen and who sat on its board of trustees, it states.
The report also recommends that the ECB adopt explicit rules for its supervisory board, and require members of the executive board to be accompanied by a staff member at all meetings they attend.
However the inquiry, which was triggered by a complaint by the advocacy group Corporate Europe Observatory (CEO), found no evidence that G30 meetings could have directly influenced or have had an adverse impact on the ECB’s supervisory tasks.
Changed responsibilities
It is the second inquiry into the issue based on a complaint by CEO, after former EU ombudsman Nikiforos Diamandouros found that Draghi’s membership of the G30 was not incompatible with the independence, reputation and integrity of the ECB.
But O’Reilly said the situation today is “different from that of 2012”, because the ECB has since been charged with supervising banks within the EU through the Single Supervision Mechanism.
An ECB spokesman said on Wednesday that the central bank has taken note of the ombudsman’s recommendations and will respond in due course.
About Liz Heron
Liz Heron is a journalist based in London. She worked on daily newspapers for more than 16 years as an education correspondent, section editor and general news reporter. She was Education Editor of the South China Morning Post in Hong Kong and has contributed to a wide range of British media including The Independent, The Guardian and the BBC.
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A shame it has come to this. Such meetings without minutes allow interactions and exchange of ideas that otherwise take months to complete in innumerable lunches, phone calls and chats in the margins of other events.