EU to probe ECB links with banks

EU ombud Emily O’Reilly said on Friday she had opened a probe into ties European Central Bank president Mario Draghi and aides have with private banks following a complaint from a research group.

EU ombud Emily O’Reilly said on Friday she had opened a probe into ties European Central Bank (ECB) president Mario Draghi and aides have with private banks following a complaint from a research group.

The nongovernment organisation (NGO) Corporate Europe Observatory (CEO) filed the complaint over top ECB staff links to the Group of 30 (G-30), which brings together the leaders of both the public and private financial sector. “I have decided to open an inquiry into this complaint,” O’Reilly said.

The NGO made a similar complaint in 2012 to her predecessor who cleared Draghi of any conflict of interest but filed a new complaint arguing that the ECB is now operating in a different context.

“I acknowledge the need to reflect on this new context. However, I have taken no position in relation to any of these matters except to consider that they warrant further inquiry,” O’Reilly said.

Her office would ask the ECB to allow inspection of documents linked to the G-30 as well as to meet with central bank officials to discuss aspects of the complaint, she said. Her office will then ask the ECB for a written response to the complaint.

“CEO research has exposed a severe lack of critical distance between the ECB’s decisionmaking bodies and corporate bankers in the G-30,” the NGO said. “As Europe’s central bank is tasked with regulating the financial sector and supervising other central banks in the eurozone, any perceived or actual conflicts of interests pose a great risk to the ECB’s integrity,” the NGO said.

Members of the G-30 include the heads of private banks UBS and JP Morgan, the governors of the central banks of England, Japan and China as well as other figures such as former ECB president Jean-Claude Trichet, the Nobel economics prize winner Paul Krugman and the former head of the US Federal Reserve, Ben Bernanke.

A spokesman for the ECB said: “We look forward to providing the ombudsman with information on this matter.” Under EU treaties, the ECB is required to “maintain a dialogue with external stakeholders” and the G-30 is a relevant forum to engage with.

But the spokesman said: “We have a range of rules and instruments in place to avoid apparent or potential conflicts of interest.”