The European Union's ombudsman has opened an investigation into how the EU's banking regulator approved a move by its executive director to become head of a top banking lobby.
The European Banking Authority (EBA) said in September that its executive director, Adam Farkas, was resigning to become chief executive of the Association for Financial Markets in Europe (AFME).
18-month ban on Farkas
EBA put in place several conditions, including an 18-month ban on Farkas advising AFME and its members on topics directly linked to his work during his three years at EBA. The AFME declined to comment. Farkas could not immediately be reached for comment. But some EU lawmakers said the conditions were too lenient for what they described as another example of a "revolving door" that allows EU officials to end up in lucrative private-sector jobs too easily.
"The inquiry is based on a complaint from the organization Change Finance, which argued that the Executive Director's move to the Association for Financial Markets in Europe will create conflicts of interest," the ombudsman said in a statement on its website.
In a letter dated January 16 to EBA's chair, former Santander banker Jose Manuel Campa, the EU ombudsman sets out a series of questions for the watchdog to answer, including when and how did Farkas become aware of the job opportunity at AFME. It also asked why Farkas appeared to remain a board member of a sister EU watchdog, the European Securities and Markets Authority, after tending his resignation at EBA.
End of 'casino' banking
"As to the Ombudsman's decision to open an investigation into Adam Farkas' move to AFME, of course we acknowledge this decision and remain committed to cooperating with them and replying to their enquiry," EBA said on Tuesday.
Change Finance lobbies to end "casino" banking and to press the financial sector to invest more in socially and ecologically sustainable activities. The ombudsman conducts inquiries into cases of alleged maladministration by EU institutions, though it has no powers to make its rulings binding. Gerry Cross has been nominated to replace Farkas at EBA. He is currently a regulatory policy official at the Central Bank of Ireland and, between 2011 and 2015, was head of lobbying at AFME.