Anger as EU regulator moves to lobbying

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European Banking Authority chief Adam Farkas. AFP

A top EU banking regulator was named as head of one of Europe’s most important financial lobbies on Tuesday, drawing criticism from advocacy groups and MEPs.

Adam Farkas announced his resignation – effective January 31, 2020 – from the European Banking Authority that he led since its creation in 2011 in the wake of the financial crisis.

 

Farkas on Tuesday was named CEO of the Association for Financial Markets in Europe, a powerful lobby for “the leading global and European banks and other significant capital market players”, according to the AFME website.

“We carried out an extensive search of the pan-European market and Adam was clearly the outstandingly qualified candidate,” AFME chairman Michael Cole-Fontayn said in a statement.

The move has drawn criticism since it was first reported in the media earlier this month.

It recalls the furious reaction when former European Commission chief Jose Manuel Barroso took a job in 2016 at investment bank Goldman Sachs after 10 years at the head of the commission from 2004 to 2014.

Then French president Francois Hollande branded Barroso’s recruitment “morally unacceptable”.

“As you are aware, the Executive Director of the EBA is required after leaving service ‘to behave with integrity and discretion as regards the acceptance of certain appointments or benefits’,” a letter from NGO Finance Watch said.

 

“In our view, moving directly from senior banking supervisor to senior banking lobbyist would not demonstrate these qualities, quite the opposite,” said the letter, which was signed by Benoit Lallemand, the head of Finance Watch.

In announcing the departure, the EBA on Tuesday said it had posed conditions on Farkas’ new job after carrying out an assessment.

Farkas “will no longer participate in the EBA’s policy and supervisory work and will focus exclusively on operational matters” until his departure, it said in a statement.

The authority said Farkas also “cannot engage in lobbying or advocacy of the EBA, or have professional contacts with EBA staff, for 24 months after leaving the Authority.”

Farkas would also be barred from advising the lobby on EBA-matters for 18 months after leaving the authority, it said.

MEP Sven Giegold, a financial expert for the Greens party, called the conditions weak, adding that they “do not solve the fundamental problem of the conflict of interest.

“The crucial point is not whether Farkas lobbies the banking supervisor, but whether his insider knowledge goes directly to the banking lobby,” he said.