Conflict of interest at the ECB?

The institution of the EU Ombudsman recently received a complaint from NGO Corporate Europe Observatory (CEO), concerning the ties that exist between major members of the ECB management and the Group of the 30.

The Group of the Thirty, created in 1978, is a private non-profit organization made up of the notable representatives of the public and private sector, as well as from academia, according to the presentation of the website of the institution, and its mission is "the drawing up of solutions for improving economic and financial stability". The president of the organization is Jean-Claude Trichet, former president of the European Central Bank, and its honorary president is Paul Volcker, former president of the Federal Reserve in the 80s.

The G30 also includes leaders of major international banks, which came under the oversight of the ECB in the last two years.

A spokesperson of the ECB said that the institution will provide all the required information to the Ombudsman, but at the same time, it stressed that "in compliance with the provisions of the EU treaties, the ECB must maintain a dialogue with concerned persons from outside the institution, and the G30 is a relevant forum to that purpose", according to a report by the RTE website, Ireland's public radio and TV network.

Furthermore, the ECB officials think that they have the obligation to explain to investors the monetary policy decisions, and the effects are beneficial for the functioning of the channel for sending the monetary policy to the real economy.

The institution of the EU ombudsman is led by Emily O'Reilly, who got the vote of the European Parliament for that position in 2013. According to its mission, the Ombudsman investigates the complaints concerning the activity of various European institutions and agencies.

The complaint addressed to the EU ombudsman focuses particularly on the role of Mario Draghi, who is also a member of the G30.

The CEO website shows that "our studies show a severe lack of critical distance between the decision making elements of the ECB and the bankers that are members of the G30", and "as the European Central Bank has also been given the task of regulating the financial sector, any real or perceived conflicts of interests represent a major risk to the integrity of the ECB".

ECB spokesperson said that "we have a large range of regulations and instruments to avoid apparent or potential conflicts of interest".

The CEO representatives think that the current framework is not enough, because "our analyses show that the high ranking personnel of the ECB is way too close to the representatives of the banks it is supposed to oversee".

A similar complaint of the NGO was rejected in 2012, but the current Ombudsman, Emily O'Reilly, made the decision to open the investigation due to the fact that "the ECB has taken on more major responsibilities in the last few years", according to Financial Times.

According to the FT article, the EU ombudsman does not have the power to apply sanctions, but it can analyze private documents and demand explanations from the ECB officials.

Also, the recommendations of the Ombudsman are not binding, but "notices about their blatant infringement can be sent to the European Parliament", according to Financial Times.

Will the EU ombudsman reach the conclusion that there is a conflict of interest at the ECB? Very unlikely, because it would introduce new elements of uncertainty in the Eurozone, at a very politically unfavorable moment.