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.
“As a first step in my inquiry, I would ask that the ECB facilitate an inspection of all relevant ECB-held documents which will help my Office gain a fuller understanding of the extent and range of the ECB’s overall involvement with the G30,” O‘Reilly said in a letter to Draghi.
In the letter, she also asks for meetings with the officials involved. No deadline has been set for the ECB’s response.
Draghi has been a member of the G30 since 2006, when he was still the governor of the Bank of Italy.
ECB vice president Vitor Constancio and Sabine Lautenschlaeger, who represents the ECB’s supervisory arm on the board, have also spoken at G30 meetings. Their speeches were published on the ECB’s website.
ECB senior supervisor Julie Dickson contributed to a G30 paper on banking conduct, albeit only as an external observer.
“The Treaty requires the ECB to maintain a dialogue with external stakeholders,” an ECB spokesperson said.
“We see (the G30) as a relevant forum to engage with, always remembering that we have a range of rules and instruments in place to avoid apparent or potential conflicts of interest.”
A similar complaint lodged by the same activist group in 2012 was rejected by then-Ombudsman Nikiforos Diamandouros.
The ECB has since taken over supervision of the euro zone’s largest banks, a change O‘Reilly referred to in her letter.
“At this early stage in my inquiry, I acknowledge the need to reflect on this new context,” she said. “However, I have taken no position in relation to any of these matters except to consider that they warrant further inquiry.”
The ECB heeded a recommendation by O‘Reilly in 2015 and tightened its policy on publishing information and meeting market participants.
Editing by Catherine Evans