“Revolving door” safeguards will help ensure trust in ECB supervision
Transparency International EU welcomes safeguards agreed earlier today to prevent conflicts of interest in the supervision of Eurozone banks by the European Central Bank (ECB). The deal reached by negotiators from the European Parliament and the Irish EU Presidency will help to regulate the “revolving door” between the ECB and the financial institutions it supervises.
Transparency International EU also welcomes the democratic accountability mechanisms agreed as part of the package, which include strong parliamentary oversight and assurances on public access to documents. The deal paves the way for the establishment of European-level banking supervision, which is a key ingredient of the EU’s plans for a Banking Union.
"Banking Union is a fragile project that will need public trust to succeed” said Jana Mittermaier, Director of the Transparency International EU Office. “The measures agreed today are recognition of that fact, but the ECB will need to earn this trust by acting in accordance with the spirit as well as the letter of these regulations.
For example, the provisions on the ‘revolving door’ give the ECB some discretion on how it will operate. We encourage the ECB to look at best practice in other agencies and institutions to ensure that Eurozone banking supervision is protected from corruption and undue influence.”
The package agreed by Parliament and Council negotiators today includes:
- a requirement for the ECB to put in place “comprehensive and formal processes” that prevent conflicts of interest, including the possibility of “cooling off” periods of up to two years.
- an explicit assurance that ECB supervision will be subject to EU legislation on public access to documents.
- robust democratic oversight in the form of parliamentary approval of the Chair and Vice-Chair of the Supervisory Board and a stronger right of enquiry (subject to an inter-institutional agreement between the ECB and European Parliament.
In a recent policy paper, Transparency International EU identified conflicts of interest management, access to documents and democratic oversight as just some of the areas where the ECB needed to improve its transparency and accountability.
The ECB is scheduled to take over supervision of the largest Eurozone banks from March 2014. The agreement today is subject to formal approval by the European Parliament and EU member states.
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Transparency International is the global civil society organisation leading the fight against corruption.
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Carl Dolan, Senior EU Policy Officer
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