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ECB's Draghi defends private meetings after criticism of hedge-fund dinner
[FRANKFURT] The head of the European Central Bank has defended a private discussion about money printing plans with a group of hedge funds, saying closed-door meetings with special audiences helped the ECB do its job.
Last month, the EU's top watchdog or Ombudsman challenged the ECB over discussing sensitive plans for money printing with a group of hedge funds, giving them a headstart over investors who only found out the following day.
A top ECB official, Benoit Coeure, had said at a dinner in London attended by hedge funds, academics and bankers that the central bank would accelerate bond buying in the coming weeks.
When his speech was released on the ECB's website the following morning, the euro fell sharply and stock and bond prices jumped, prompting investors to cry foul. The ECB blamed the delay in publication on an error.
In a two-page letter written in response, ECB President Mario Draghi said that nothing discussed during the evening should have come as a surprise.
"Direct exchanges with the general public as well as with specialised audiences form an essential part of the ECB's communication policy and offer an opportunity to ... debate issues," he wrote, arguing that they were 'integral to its transparency policy'.
He underlined that the bank's officials did not use such meetings to disclose market sensitive or confidential information.
Mr Draghi said that the ECB would nonetheless take steps to improve transparency of communication.
This was welcomed by European Ombudsman Emily O'Reilly, who watches for lapses in ethics or transparency at European institutions and had asked the ECB for an explanation.
Others remained disgruntled.
"Normally the ECB should inform everybody on an equal basis and there must be exceptional reasons for only addressing a specific group," said Sven Giegold, an influential German member of the European Parliament.
That view was echoed elsewhere.
"Operating in public markets, what I expect, as an investor, is that any price-sensitive information that is released to one person must be made public to everybody," said Lorne Baring, managing director of Swiss-based wealth management firm B Capital. "There must be no privileged investor."
Central bankers regularly speak at events, give briefings and attend meetings that are not open to the media. ECB officials alone go to hundreds every year, hosted by a wide variety of organisations.