Time for Draghi to step down from G30

The EU Ombudsman has launched an inquiry into European Central Bank President Mario Draghi’s membership of the Group of Thirty (G30), following a complaint made by Corporate Europe Observatory (CEO) last month. The Ombudsman case on Draghi's G30 membership has made headlines across Europe (and beyond). Will this make the ECB answer the questions that CEO has been asking since November 2011? And will Mr. Draghi now step down from the G30?

The Group of Thirty is an exclusive club that meets in private to discuss monetary policy and banking regulation issues. Draghi and his predecessor Trichet share the club with chief executives from some of the biggest banks. The group is chaired by Jacob Frenkel of JP Morgan Chase who often acts as the group’s public face. Other members include E. Gerald Corrigan of Goldman Sachs, Guillermo de la Dehesa Romero of Grupo Santander, David Walker of Morgan Stanley. According to its website the G30 is “influential”:

“The work of the Group of Thirty impacts the current and future structure of the global financial system by delivering actionable recommendations directly to the private and public policymaking communities.”

It delivers “actionable recommendations” to public policymakers – most people would use a simpler word for that: lobbying.

Back in November 2011 we wrote:

“Given the eurocrisis, the huge bailout operations of big banks, and the ongoing debate on how to regulate banks in the light of the financial crisis, it should be obvious that safeguards are needed to ensure that the President of the European Central Bank remains independent. He should not be mixed up in any way in lobbying activities to defend the interests of private banks. Shouldn’t that include a ban against membership of a club like the Group of Thirty?”

In a letter addressed personally to the incoming ECB President we urged Mr Draghi to withdraw from the Group:

We believe that any president of the Bank has to make it absolutely clear that he or she is not under the influence of the financial lobby at any time. In particular at this dramatic point in the history of the EU, with the eurocrisis and an ailing banking sector –recipients of trillions of euro in aid – it is completely unacceptable if doubt can be cast on the independence from the financial lobby of the Bank’s president.

We therefore strongly urge you to withdraw from the Group of Thirty.

In response the ECB Press and Information Division wrote us:

“[...] please be informed that it is part of the President’s tasks to represent the ECB in international conferences, fora and groups to exchange views on international economic and financial issues and to communicate the ECB’s positions and policies. When representing the ECB in such conferences, fora or groups, the President of the ECB acts in accordance with the principle of independence and integrity.”

This did not really answer our concerns over the specific nature of the Group of Thirty which provides the banking industry with an opportunity to influence policy.

On 14 February 2012 we filed a formal complaint to the ECB’s executive board, referring to several potential breaches of the internal rules of the ECB concerning President Draghi’s participation in the work of the Group of Thirty. At the same time we submitted a request for access to documents on the case.

On 8 March the ECB replied that Mr. Draghi’s membership of the Group of Thirty did “not require any advice of the [ECB’s] Ethics Adviser nor consultation of the Governing Council and that therefore there are no related documents”, adding that “You will be explained in greater detail in a separate reply why the matter does not raise any conflict of interest.”

After we sent a reminder we finally received a short ‘explanation’ from the head of the ECB’s Press and Information Division suggesting that his participation was undertaken in a personal capacity, and that  this was compatible with the Code of Conduct.

As we didn’t seem to be getting any further, we decided to take our complaint one level higher, to the EU ombudsman.

In our complaint we repeated that we consider Draghi’s membership of the ‘Group of Thirty’ – a banking lobby group to be at odds with the ECB’s rules on ethics, and that the ethical principles of the ECB have been sidelined in five different ways, endangering the independence and reputation of the bank.

The ECB Staff Rules provide that members of staff shall obtain the ECB’s authorisation if they participate in “unremunerated private activity” other than “simple conservative management of family assets and activities in domains such as culture, science, education, sport, charity, religion, social or other benevolent work”. But Mr. Draghi did not ask or obtain authorisation for his participation in the activities of the Group of Thirty. CEO considers this a clear violation of the rules.

The Ombudsman has accepted our complaint and the case was opened on 24 July. In a letter to the ECB, the Ombudsman has asked the central bank for an opinion on the allegation that “the ECB President’s membership of the Group of 30 is incompatible with the independence, reputation and integrity of the ECB” and on the claim that “The ECB should ask its President to withdraw from the Group of 30”.

Interestingly the ombudsman has also asked the ECB to include in its answer comments on whether the ECB considers that the fact that the membership of the Group of 30 also includes persons currently working in the private sector could result in the appearance of a conflict of interest, as defined in the OECD’s 2003 Recommendations on Guidelines for Managing Conflict of Interest in the Public Sector.

In fact, a 2007 OECD report on implementation of these Guidelines noted that “Increased media focus made it necessary in many countries to pay more attention to appearance issues, in particular at the top level, in post-public employment and lobbying.”

This seems to apply directly to Draghi’s membership of the Group of Thirty and it adds another argument in favour of Draghi’s withdrawal from the Group of Thirty. There also appears to be quite some scope for the ECB to improve and clarify it’s internal rules on conflicts of interest and to start handling those rules properly.



It's funny that mainstream media haven't talked about the story yet.

media coverage
Helen Burley
Outrageous. Draghi always

Outrageous. Draghi always tries to place ECB in God's position, above all authorities. Now we can see why.

Truly nice work CEO !!!

Truly nice work CEO !!!


Y que os creiais, que no era un corupto más; como muchos otros que estan en las Instituciones Europeas y Organismos internacionales

Great work CEO

I haven't seen any mainstream media coverage so far in France where I live.

Let us see where the CEO action will lead us to. Even though I doubt that the EU ombudsman has access to anything serious, really. Especially in terms of decision and policy-making. This is a long march towards (a little more) justice.

Meanwhile CEO documents should be compulsory reading for any EU citizen.

Conflict of interest?
Conflict of interest?

What the hell of problem do you see in this? Where the conflict of interest comes from?
A conflict of interest would require two opposite interests emerging from:
- being the ECB president
- this membership, that implies only to partecipate to some conferences

Draghi has a strong personality and a very sharp and cool mind.
Does anyone really believe that this membership can reduce his indipendence or whatever?

Here are the 30 bad guys: http://www.group30.org/members.shtml
People from very different part of the world and with very different opinions:
I see Axel A. Weber and Paul Krugman...
And there are also the BoE chief (Mervyn King) and the Bank of Canada chief, future BoE chief (Mark J. Carney) and other central bankers and ex central bankers and banckers and even Paul Krugman...
And all they do, all this membership implies, is this: http://www.group30.org/about.shtml

Please... take care of more serious conflicts

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