ECB probed by watchdog over ties with bankers in G30 group

Fri Jan 20, 2017 11:06am EST
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By Francesco Canepa

FRANKFURT (Reuters) - The European Union's ethics watchdog has opened an inquiry into the participation of European Central Bank President Mario Draghi and senior ECB officials in the work of an exclusive group that includes bankers and fund managers.

The European Ombudsman's probe relates to ties between ECB officials and the Group of Thirty, a private organization where policymakers, economists, bankers and fund managers meet behind closed doors to discuss economic and monetary affairs.

Ties between the ECB and financial sector firms have been in the spotlight since 2015, when a top official discussed the bank's money-printing plans at a private event with hedge funds.

The new inquiry was triggered by a complaint by activist group Corporate Europe Observatory, which says proximity between ECB officials and the G30 is incompatible with Frankfurt's role as the euro zone's top banking watchdog.

Members of the G30 include several former and current central bankers, including Bank of England governor Mark Carney and the Bank of Japan's Haruhiko Kuroda, as well as Nobel prize winner Paul Krugman.

But it also includes the chairmen of several commercial banks, such as JPMorgan's Jacob A. Frenkel and UBS's Axel Weber. Both firms have small units in the euro zone that are directly supervised by the ECB.

The G30 publishes policy recommendations on a wide range of financial issues including banking supervision.

Ombudsman Emily O'Reilly, who watches for lapses in ethics or transparency at European institutions and can make non-binding recommendations, is now asking the ECB to hand over documents illustrating its ties with the group.   Continued...

FILE PHOTO: European Central Bank (ECB) President Mario Draghi addresses the European Parliament's Economic and Monetary Affairs Committee in Brussels, Belgium, November 28, 2016.   REUTERS/Yves Herman/File Photo