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Debates
Thursday, 24 October 2019 - Strasbourg Provisional edition

Appointment of EBA Executive Director Farkas as AFME Chief Executive (debate)
MPphoto
 

  Paul Tang, author. – Madam President, thank you also for explaining the catch-the-eye procedure. I appreciate it. Recently, it was announced that Mr Adam Farkas, Executive Director of the European Banking Authority (EBA), will become the CEO of the Association for Financial Markets in Europe (AFME). It’s remarkable, right? It’s astonishing. It’s flabbergasting that the supervisor of that sector becomes the main lobbyist for that same sector.

The EBA is responsible for supervising the EU’s banking sector and for setting technical standards implementing key financial regulations. This makes the EBA of fundamental importance in supervising the financial sector. It also makes it a constant lobbying target for the industry. Especially AFME, with its technical expertise and focus on implementing measures drafted by the EBA, has permanent interaction with the European Banking Authority. You can just imagine my surprise when I learned that the EBA’s Executive Director will become AFME’s CEO.

Farkas’ move gives the banking lobby privileged insight into the EBA’s decision—making and private access to high—level staff. As such, banks will be able to excessively influence key pieces of legislation. What is worse, this move may give EU staff the wrong idea that if you are friendly towards the sector that you are meant to regulate then you will be awarded a well—paying job. In other words, this opens the door for very perverse incentives.

The EU rules need to prevent this and want to prevent this. Article 16 of the EU Staff Regulations states that EU officials are prohibited from lobbying staff of their former institutions for a period of one year. As CEO of AFME, maintaining contact with the EBA is the headline of one’s job description. Is it realistic to expect Farkas to sit in AFME’s tower, avoiding contact with his organisation’s main interlocutor?

The Staff Regulations also allow the blocking of professional moves if that leads to a conflict with the legitimate interests of the institution. Is good supervision of the banking sector no longer a legitimate interest of the European Banking Authority? Because that’s what’s severely undermined by Farkas’ move. Furthermore, if this case of revolving doors doesn’t lead to a conflict of interest sufficiently severe to block it, if Farkas is allowed to join AFME, any EU official will be allowed to join any organisation. In effect, it renders Article 16 meaningless.

Yesterday, we launched a petition with 58 NGOs against this case of revolving doors. Many people are disappointed, frustrated, or even outright angry. On behalf of the citizens of Europe, I therefore ask you: do you deem Farkas’ move to be in line with the Europeans institutions high ethical standards? Do you agree with Mr Farkas remaining in his position until the end of January? Will you exert pressure on the EBA to change its position and block Mr Farkas’ professional move? And what will you do to put our ethical standards into practice and prevent further cases of revolving doors from undermining citizens’ trust in our institutions?

 
Last updated: 5 December 2019Legal notice