FRANKFURT (Reuters) – The European Central Bank announced greatly expanded conduct rules for policymakers and supervisory board members on Wednesday, regulating a wide range of activities from investments to asset disclosures and even private engagements.
Frustrated by leaks, frequent breaches of quiet period rules and – in the case of one governor – accusations of corruption, the ECB will also regulate public engagements of policymakers, a tricky move as most are employed by national central banks and not the ECB.
Still, the ECB will have blunted tools to enforce the new rules as the most severe punishment for non-compliance will be a public reprimand, according to the code, long in the making and approved unanimously by the 25-member Governing Council.
“The code improves the management of potential conflicts of interest by introducing specific rules for post-employment activities, private financial transactions and relations with interest groups,” the ECB said in a statement.
“It also foresees the publication of Declarations of Interests and monthly calendars, and includes measures for pursuing cases of non-compliance,” it said about the rules that went into effect on Jan 1.
Governing Council members have resisted tighter rules in the past, arguing that existing regulations and national legislation adequately cover them, and that they also needed independence in their public engagements.
Policymakers will not be allowed to make market-sensitive remarks at closed-door events unless their speeches are published in real time or if the event is covered by the media. They may also not speak, including to the media, during the quiet period, or a week before policy meetings.
While they will not be required to make a full disclosure about their wealth, the code asks policymakers to place their investments under the control of portfolio managers with full discretion to act.
Policymakers will also face a cooling-off period after their employment ends and will be prevented from taking certain jobs for up to one year. During this cooling-off period, central banks will be required to continue paying their ex-employees.
ECB president Mario Draghi faced criticism from the European Ombudsman last year for his membership of the opaque G30 club, a closed-door forum of financiers, economists and current and former policymakers.
Although the Ombudsman suggested Draghi should quit to protect the ECB from a perception that its independence may be compromised, he retained his membership.