Brussels, 25 February – European leaders handling the economic downturn are relying on the advice of a committee dominated by financial industry insiders implicated in the current crisis, says a new report.
'Would You Bank on Them?' examines the track records of members of the EU's High Level Group of financial "wise men", who are charged with helping to frame Europe's response to the meltdown in the financial sector. The group, named after its chairman Jacques de Larosière, is expected to deliver its proposals for reform of the financial system to the Commission today.
Of the eight men, four have close links to giant finance corporations deeply implicated in the crisis such as Lehman Brothers (Rainer Masera), Goldman Sachs (Otmar Issing), BNP Paribas (de Larosière), and CitiGroup (Onno Ruding). A fifth, Callum McCarthy, was the head of the UK Financial Services Authority, accused of systematically failing during the crisis. Another, Leszek Balcerowicz, is well-known for his opposition to regulation.
The Group is set to exert significant influence on the international response to the financial crisis. These proposals will be addressed by the European Council at its Spring Summit, just days before the crucial G20 summit on the financial crisis in London in April, attended by Barack Obama.
Paul de Clerck of Friends of the Earth Europe said: "Most of these guys have acted like wild cowboys. They have brought misery to millions of people. Their one-sided advice is not wanted. They are part of the problem, not part of the solution. The Commission should not rely on a group with such close ties to the financial industry."
One of the report authors, Kenneth Haar from Corporate Europe Observatory said: "Commissioner McCreevy has acknowledged that there has been too much 'regulatory capture' by the financial services sector. Yet, the de Larosière Group embodies this – it represents very narrow ideological views and economic interests."
The report argues that instead of repeating mistakes of the past, the Commission should break new ground, by investigating how financial industry lobbying contributed to the present crisis, and by employing entirely new consultation methods.
Author Andy Rowell from SpinWatch said: "The Commission must aim for an open and transparent process that ensures that policy recommendations are in the interests of all Europeans, not just the financial industry."
The report is published by Corporate Europe Observatory, SpinWatch, LobbyControl and Friends of the Earth Europe.
Read the full report, 'Would you bank on them?' here.
The de Larosière group consists of:
Jacques de Larosière: Co-chair of the financial sector lobby organization, Eurofi, and until recently, adviser to the French bank BNP Paribas for a decade;
Rainer Masera: Former Managing Director of a European branch of Lehman Brothers, which went bankrupt after heavy losses on subprime loans;
Onno Ruding: An adviser to CitiGroup, owners of Citibank that received billions of US dollars in a bail-out;
Otmar Issing: Adviser to the financial giant Goldman Sachs;
Callum McCarthy: Former head of the UK Financial Services Authority, accused of systematically failing in its duty over bust British bank, Northern Rock;
Leszek Balcerowicz: A strident advocate of deregulation;
José Pérez Fernández: Works for a financial market intelligence company, which counts big banks as clients;
Lars Nyberg: A career banker, now vice chair of the Swedish National Bank.