July 5, 2018 / 1:00 PM / 2 months ago

EU watchdog wants next ECB boss barred from joining opaque G30

(Reuters) - The next head of the European Central Bank and other ECB policymakers should be barred from joining an opaque club of top figures in finance, the European Union’s Ombudsman said on Thursday, referring the matter to the European Parliament.

FILE PHOTO: European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany, March 7, 2018. REUTERS/Ralph Orlowski

Ombudsman Emily O’Reilly also renewed her call for ECB President Mario Draghi to renounce his membership of the Group of 30, after the ECB rejected her earlier recommendation that he quit the group to protect the central bank’s reputation.

O’Reilly had cited “a public perception” that the ECB’s independence as the euro zone’s top banking supervisor could be compromised as a result of Draghi’s involvement in the club.

“The ECB should seek to ensure that neither the next President of the ECB, nor any other member of ECB decision-making bodies, becomes a member of the G30,” O’Reilly said in a statement on Thursday.

The G30 is a private forum of financiers, economists and current and former policymakers who meet behind closed doors to discuss global economic issues. Draghi has been a member since before he became ECB President in 2011.

He is set to leave the euro zone’s central bank at the end of October 2019.

The ECB rejected the Ombudsman’s non-binding recommendation in April, arguing that Draghi’s participation in G30 discussions helped it understand economic and financial developments. It declined to comment on Thursday.

O’Reilly said the central bank was “in denial”, renewed her accusation of “maladministration” and escalated the matter to the European Parliament, which approves any appointment to the ECB’s board and to which the central bank is accountable.

“It is difficult to see how President Draghi’s membership of this private group could be viewed by the ECB as established global practice,” O’Reilly said in a letter to chair of the Parliament’s economic committee, Roberto Gualtieri.

Sven Giegold, a leftist member of the European Parliament’s economic committee from Germany, said the ECB was acting “arrogantly and negligently” by ignoring the Ombudsman’s criticism.

Other current G30 members include the central bank chiefs of Britain and China as well as Jacob Frenkel, chairman of JPMorgan Chase International.

The chairman of UBS (UBSG.S), Axel Weber, and the chief executive of Credit Suisse (CSGN.S), Tidjane Thiam — two large Swiss banks with several subsidiaries in the euro zone — also belong to the group.

“Even if the G30 does not discuss ‘microprudential matters’, the fact remains that all discussions about core issues relating to banking regulation always have direct implications for private financial institutions represented at G30 meetings,” O’Reilly said in her conclusions.

Reporting By Francesco Canepa; Editing by John Stonestreet and Catherine Evans

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