Thank you Mr. President,
On September 17, 2019, Mr. Adam Farkas announced his resignation from his position as Executive Director of the European Banking Authority – which will be effective on January 31, 2020 – to become, starting from February 1, 2020, the CEO of AFME, a well-known lobbying company that – according to its website – “is the voice of Europe’s wholesale financial services”.
Let me remind you what EBA’s responsibilities are: The EBA is responsible for supervising the EU’s banking sector and for setting technical standards implementing key financial regulations. This makes the EBA a fundamental institution that regulates and supervises the financial sector. It also, of course, makes it a constant lobbying target for the industry. AFME, like other stakeholders, appears to have permanent interaction with the EBA.
In compliance with the Staff Regulations and ethics rules, the EBA’s Board of Supervisors has taken a decision to impose fairly light restrictions on its Executive Director both while in service at the EBA and after living the EBA. However, the restrictions on Mr Farkas’ future employment do not seem neither realistic nor enforceable. Unless Mr Farkas will become simply the AFME’s poster-boy, I cannot find a single topic that AFME covers that does not fall within the remit of the EBA and does not relate to the work of Mr Farkas. Moreover, it is not clear to me who will monitor the effective application of these restrictions, in particular the one that provides that he cannot engage in lobbying or advocacy of the EBA, or have professional contacts with EBA staff, for 24 months after leaving the Authority. How are we going to control and inforce that? Who is going to do that? For this reason, we call for the review of this decision by the EBA Board of Supervisor.
Sadly, the one of Mr Farkas is not the first case, and probably not the last, of a post-public employment job in the private sector that poses evident problems of conflicts of interests, but we absolutely must act to ensure that it is the last. And I really hope it is the last. Revolving doors, where one jumps from public institutions to top positions in the private sector, from regulators to regulated or from supervisors to supervised, and vice-versa, unfortunately do not only undermine the credibility of the individual engaging in such behaviour. They undermine the credibility of the whole institution and, more generally, the trust that citizens have in public bodies. And the trust that citizens have in public institution is the backbone of democracies. Therefore, we shall not tolerate our European institutions and agencies’ credibility crumble because of some individual’s interests, and we should always remain vigilant in making sure and guaranteeing they are not influenced by private interests.
For this reason, we call on the Commission to assess the current practice on post-public employment at European and national level, to extend this review to pre-public employment conflicts of interest but also to put in place a harmonised legal framework which should include an extension of the possibility to block professional move and the provision of a cooling-off period that is proportionate to the specific case, and accompanied by an appropriate temporary allowance. Finally, we call on the Commission also to assess whether it is appropriate that the concerned EU agencies decide from themselves on the enforcement of the rules for the prevention of conflicts of interest and how a consistent application of the rules can be ensured.
I was glad to see that the resolution was supported by the unanimity of members in the ECON Committee: no votes against and no abstentions. I hope this sends out a clear signal, and the Plenary widely supports this resolution as well.