Deregulation is in part responsible for the economic crisis, so why is it acceptable for the president of the ECB to hang out with his old mates from the banking world and discuss profits - asks campaign group
There is a popular theory that the human psyche goes through a number of stages before accepting change it does not like. First comes denial, then anger, followed by resistance, depression and finally acceptance. If we apply this theory to Europe's relationship with the banks, the European Central Bank seems to be stuck at the denial stage.
Earlier this summer, Corporate Europe Observatory filed a complaint with the European Ombudsman over the president of the ECB's membership of the Group of Thirty – a bankers' group which brings together high profile bankers from the private and public sectors. The ombudsman agreed to investigate the case.
The problem, we explained, was that the G30 functions as a lobby group for the banking sector - one of its stated aims being to influence global regulation. And it has previously advocated on behalf of lax regulation, as have a number of the private banks. As a member of the group, the ECB President, Mario Draghi would be party to these discussions and would face a conflict of interests in his role at the central bank.
The ECB has now formally responded to the ombudsman regarding CEO's complaint
, but the problem is clear. It is in denial. It cannot see why Draghi's role might cause a problem. It says: "The ECB president's membership of the Group of Thirty is fully compatible with the independence, reputation and integrity of the ECB - and most importantly, does not entail any conflict of interest."
The response continues: "As a member of the group, the ECB president may attend meetings and seminars that allow for an exchange of views on global economic and financial issues. Such dialogues provide a useful opportunity not only to better understand the views and perceptions of international policy-makers, market participants and academics - but also to explain ECB policy measures to a wider audience."
The ECB's response goes on to also deny that the G30 is an "interest group" - or lobby group – insisting it is in fact "a non-partisan discussion group". A non-partisan discussion group that states on its website that it is "influential" and that its work "impacts the current and future structure of the global financial system by delivering actionable recommendations directly to the private and public policymaking communities".
The ECB clearly does not get it – or maybe it does not want to understand. Europe is in a state of crisis as member states attempt to deal with the enormous debts that originated initially from the 2008 banking crisis. Deregulation in the financial markets - pushed for by the bankers - is in part responsible for the sorry state we are in. But of course, it is absolutely fine for the president of the ECB to hang out with his old mates from the world of private banking and discuss how banks might best profit. Sorry, deliver us from this sorry mess.
Given that the ECB looks set to get a major role in regulating and supervising banks in the European Union and with the likelihood of a 'banking union' in the near future - surely we have all reason to demand that the bank acts independently, and with total integrity. It might mean angry bankers, but if we are to have a banking system that the public can trust, that might be something the ECB has got to face up to. The next step would be for Draghi to leave the G30. Kenneth Haar and Helen Burley work for the Corporate Europe Observatory campaign group, in Brussels