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ECB’s Insider Connections Under Scrutiny Again

IMAGE: The Daily Coin

Necessary to “maintain a dialogue” with external actors, says ECB

By Don Quijones | 25 January 2017

WOLF  STREET — Just months after chastising former European Commission President Jose Manuel Barroso for accepting an “advisory” role with Goldman Sachs, EU Ombudsman Emily O’Reilly has a new job on her hands: investigating the close ties ECB President Mario Draghi and aides have with private banks. The inquiry, launched after a complaint lodged by the NGO Corporate Europe Observatory (CEO), will delve into Draghi’s membership of the Group of Thirty, a secretive forum of influential finance executives, academics, and policy makers.

“CEO research has exposed a severe lack of critical distance between the ECB’s decision-making bodies and corporate bankers in the G30,” the NGO said. “Our study shows that high-level employees of the ECB are far too close to the representatives of the banks they supervise and that the information they transmit at the G30 meetings is out of control,” asserted Kenneth Haar, a member of CEO.

The Washington-based Group of Thirty (often shortened to G-30) was founded in the late seventies at the initiative of the Rockefeller Foundation, which also provided start-up funding for the organization. Its current chairman is Tharman Shanmugaratnam, the deputy prime minister of Singapore. The chairman of its Board of Trustees is Jacob Frenkel, a former governor of the Bank of Israel and current chairman of JP Morgan Chase International.

The Group of Thirty’s membership reads like a Who’s Who of the world of global finance. It includes establishment economists such as Lawrence Summers, Paul Krugman, and Kenneth Rogoff, as well as current and former central bankers like Haruhiko Kuroda (Bank of Japan), Mark Carney (Bank of England), Mario Draghi (ECB), Christian Noyer (Banque de France), and Jaime Caruana (Bank for International Settlements). It also comprises senior representatives of financial corporations with subsidiaries supervised by the ECB, including Axel A. Weber (UBS), Gail Kelly (UBS), Tidjane Thiam (Crédit Suisse), Guillermo de la Dehesa (Santander), and E. Gerald Corrigan (Goldman Sachs).

This cozy little forum meets twice a year to “deepen understanding of international economic and financial issues, and to explore the international repercussions of decisions taken in the public and private sectors by market practitioners and policymakers.” […]

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