Tuesday, July 31, 2012

ECB Prez Under Investigation

The European Union's internal watchdog has launched an investigation of European Central Bank President Mario Draghi following a complaint of conflict of interest, the institution's spokeswoman said on Monday, reports Reuters.

Corporate Europe Observatory (CEO), which tracks EU-focused lobbying, accused Draghi in June of lacking independence because of his membership in an international forum of public and private sector financial leaders, the Group of Thirty (G30).

"We received a complaint and sent a letter to the ECB," said Gundi Gadesmann, spokeswoman for EU ombudsman Nikiforos Diamandouros.

According to Reuters:
"Draghi is alleged to maintain close ties with the group and to participate in closed meetings," the transparency group said last month.

"(G30) bears all the characteristics of a lobbying vehicle for big international private banks and the President of the European Central Bank should not be able to be a member, due to concerns over the bank's independence," it said.

Chaired by former ECB President Jean-Claude Trichet, the G30 gathers influential regulators, financial executives and academics.

Former Federal Reserve Chairman Paul Volcker, Bank of Canada Governor Mark Carney and Bank of England Governor Mervyn King are also members.
Of course, Draghi is an insider. That's how you get to be the head of the ECB.


  1. I do believe that Timmy Geithner was also a member of the Group of Thirty. Scrubbed from the current version of the Wikipedia entry on the Group of Thirty is this tidbit that I came across when I learned Mr. Geithner was nominated to be Treasure Secretary:

    "The Group of Thirty’s groundbreaking work on derivatives, Derivatives: Practices and Principles, published in 1993 was commissioned in the 1990s just as the use derivatives grew and began to move into the mainstream of finance. It was based on wide ranging survey of the industry. At the time many, both inside and outside of the financial industry, were uncomfortable with derivatives activity. They saw it as complex and obscure, potentially subject to abuse that might lead to the failure of individual firms or even to a crisis in the financial system. The G30’s final report, Derivatives: Practices and Principles, recognized and addressed these concerns by explaining derivatives and their uses and by formulating and disseminating recommendations about their proper management. It is still widely read today, often being used as a textbook for students of accounting and finance and market practitioners, due to its relatively plain language. It gives a comprehensive explanation of what derivatives are, the needs they serve, their risks, and their relationship to traditional financial instruments."

  2. And as the chickens came home to roost...