O’Reilly challenges ECB for disclosing bond plans over dinner

EU ombudsman expects public response from Frankfurt within two weeks

European ombudsman Emily O Reilly has written to European Central Bank president Mario Draghi asking him to explain how a senior member of the European Central Bank executive board disclosed market-sensitive information during a private dinner with investors in London last week.

“The French member of the ECB released certain information which appears to have had an impact on the markets. The ECB has come out and said there was a technical error, but given public concern about privileged access, about influence in general within the EU, I thought it would be appropriate for me to ask a few questions about that,” Emily O’Reilly said on Thursday in Brussels.

“I’ve sent a letter to Mario Draghi, asking him to explain what happened, and to see what measures he proposes to take to prevent that sort of thing happening. I have no reason whatsoever to believe that anything sinister happened, but the fact that it happened means that something went wrong in the process.”

French central banker Benoit Coeure, a senior member of the executive board of the ECB, disclosed information during a private dinner with hedge fund managers and bankers in London last week, hours before the information was released into the public domain. The error led to a delay of more than 12 hours before the remarks by Mr Coeure, who also sits on the ECB's rate-setting governing council, were made public by the bank.

Mr Coeure is understood to have told bankers that the ECB would speed-up its bond-buying purchase programme before the summer.

Internal procedural error

An ECB spokesman told The Irish Times that the bank would respond to the Ombudsman's letter, and that that response would be made public. He added that, due to an "internal procedural error" the speech had not been published at the time it was delivered. It is expected that the ECB will respond to the letter within the next two weeks.

The dinner, which took place in the Berkeley hotel in Knightsbridge, took place after a one-day conference, Removing the zero lower bound on interest rates, hosted by Imperial College London on May 18th. The Centre for Economic Policy Research, the Swiss National Bank, and the Brevan Howard Centre for Financial Analysis, which is funded by European hedge fund Brevan Howard, also organised the event.

At the launch of her annual report for 2014 in Brussels on Thursday, Ms O’Reilly said that the issue touched on the broader question of lobbying and transparency within the European institutions.

“This shows that in the induction process, in every institution, there should be awareness-training in relation to lobbying. Officials are busy people [ ...]they should be made aware of the way the lobbying industry works.”

Ms O Reilly last year wrote to the ECB requesting the publication of a letter sent by former ECB president Jean-Claude Trichet to the late Minister for Finance Brian Lenihan in 2010. Ms O Reilly's intervention is understood to have led to the decision by the ECB to release the letter earlier this year.

The office of the ombudsman is charged with holding European Union institutions accountable to citizens and investigating allegations of maladministration in the EU. While EU institutions are not obliged to comply with the ombudsman's recommendations, they do so in 80 per cent of cases.

The ombudsman’s report published yesterday, shows the office dealt with more than 23,000 enquiries by complainants last year, with 2,079 official complaints registered.