The European Union’s top regulator is calling on the European Central Bank (ECB) to strengthen its rules of engagement by putting a stop to banker meetings prior to rolling out policies.
Ombudsman Emily O’Reilly told Reuters that she would pen a letter to the ECB’s President Mario Draghi about promoting transparent behavior ahead of setting policy. Reilly said that ECB officials should not give investors any advantage over rivals prior to setting policy such as interest rates.
The transparency debate at the ECB was triggered when an ECB official revealed market-sensitive information during a private dinner earlier this year.
“It has already been established by the ECB, in its speaking engagement guidelines, that it should not give a prestige advantage to certain groups over others when a board member meets them," O'Reilly told Reuters.
On Twitter, earlier this month, Switzerland-based Frederik Ducrozet, an industry analyst tweeted:
Published diaries of officials reveal that investors and banks met frequently with policy makers. According to an article on the Financial Times, two members of the ECB’s executive committee met with UBS prior to a two-day policy meeting with the ECB’s rate-setting governing council.
One of the ECB officials also met with BNP Paribas hours before the central bank threw the market a curve ball by slashing interest rates—the charge for banks that store money at the ECB.
As an Ombudsman, O’Reilly is tasked with policing the actions of European institutions by promoting sound ethical behavior. While O’Reilly’s recommendations may not lead to legal trouble for the ECB, they add to the central bank’s transparency challenge.