Better Finance has long denounced the disproportionate influence by financial institutions on the policy making process though the use of strong financial lobbies who seek to limit financial regulation or adjust it to their advantage. Over the last years BETTER FINANCE has repeatedly called for a more balanced representation in the European Commission’s advisory system and Expert Groups, in particular the European Supervisory Authority's three key branches, the European Banking Authority (EBA), the European Securities and Markers Authority (ESMA) and the European Insurance and Occupational Pensions Authority (EIOPA). Whereas there have been some improvements, industry representation still considerably outnumbers representatives from civil society.
A new report by MEP Martin Ehrenhauser estimates that roughly € 123 million are spent by the financial industry on influencing EU Financial policy compared to a measly € 4 million by NGOs, trade union and consumer organisations representing end-users of financial services and products. However, in this report Mr Ehrenhauser does not limit himself to statistics on the number of lobbyists and the amount of money available to the financial lobby, but actually further scrutinises those corporations who directly or indirectly advise the commission on a variety of issues. Strikingly, but not surprisingly, he points out that a number of these corporations are under investigation for, or have been found guilty of, serious ethical, financial or environmental misconduct.
Amongst the corporations mentioned are two of Europe's biggest banks – Barclays and Deutsche Bank. Both banks have been accused of mis-selling and of illegally manipulating financial markets & interest rates, yet sit within ESMA and EBA advisory committees, thus directly advising the Commission on how to regulate financial markets.
Appropriately, the author of the report wonders how “a bank that has been found guilty of manipulating various financial and commodity markets [can now be] advising the Commission on commodity markets or on the regulation of the European financial system?”.
Please find the report here.