Baby steps towards more ECB accountability

Transparency International EU has published a report about the European Central Bank (ECB). The author of the report, Dr. Benjamin Braun, has analyzed the independence, transparency, accountability and integrity of the ECB.

Several media organizations covered the findings.

The launch of the report was accompanied by a symposium in Brussels on Tuesday. During an interesting panel discussion, it was debated how the ECB can improve the way it works. Carl Dolan and Leo Hoffmann-Axthelm from Transparency International EU stressed that the ECB had cooperated with the NGO.

Benoît Cœuré addresses the room. Source.

Many topics were covered during the discussion. For example the status of whistleblowers, freedom of information requests, and the “cool-off period” demanded when ECB executives move to the private sector.

But my main interests were monetary policy and the ECB’s supervision of the banking sector.

Benoît Cœuré, Executive Board member of the ECB, defended his institution. Indeed, data1 proves that mister Cœuré gives a lot of speeches to spread the views of the ECB.

He was also in favor of publishing dissenting votes of the Executive Board. The departure from unanimity would give observers more insight into the direction of monetary policy for the euro area. Doing so would be more in line with the situation in the U.S., where Fed watchers can learn about the distribution of doves and hawks among policy makers.

Mr. Cœuré was asked about the corporate bonds bought by the ECB in its extended asset purchase programme2. Critics have noted that the ECB is funding multinationals and climate change. The central banker replied that the ECB only takes financial considerations into account when it executes its policy.

MEP Ramon Tremosa pointed out that the top of the ECB sometimes doesn’t answer questions posed to them in the European Parliament3. I also find this very problematic. It is true that the ECB is independent from politics, and for good reasons. But this does not mean that the central bank should be unaccountable to elected representatives.

The most recent call from MEPs for more transparency by the ECB was launched under the slogan Audit the ECB. But the Parliament has been fighting for more openness from the central bankers for years.

Mr. Tremosa had some ideas to improve the oversight of the Parliament on the Bank. The time for questions could be extended, or there could be more staffers specialized in monetary issues.

Claire Jones, who covers the ECB for the Financial Time, had an interesting proposal. She described how the Bank of England is monitored by the British Parliament. Instead of giving all Parliamentarians a chance to interrogate Mario Draghi (and as Ms. Jones rightfully said, some politicians use this as an opportunity for grandstanding), a dedicated committee could be selected. This would allow specialists like MEP Tremosa, who is a professor of economics, to fulfill their role as democratic guardians.

The report of Transparency International EU contributes to a more transparent and accountable ECB. It seems the EU is taking baby steps towards the American model.

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  1. See figure 8 on page 35 of the report.
  2. Better known as quantitative easing (QE).
  3. Mr. Tremosa also remarked that he had shared this experience on Twitter, but this wasn’t picked up by the media. Few journalists or members of the public are interested in Europe, let alone its central bank. All the transparency in the world will not do much good if nobody is paying attention…

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