For Finance Watch, this is a disappointing decision. Finance Watch had written to EBA chair Mr Campa asking that the EBA prohibit this move or impose a strict cooling off period of between two and five years. It seems our letter arrived too late: this morning, EBA announced that it would allow Mr Farkas to go through the revolving door with conditions that do not meet appropriate standards.
Mr Farkas will be free to advise AFME and its members after only 18 months. He is also barred from personally lobbying the EBA for two years.
Given Mr Farkas’s inside knowledge of EBA’s strategy and procedures, the high threat level around financial stability, and the long life-cycle of financial policymaking, the 18-month soft cooling-off period is too short to guarantee that the supervision of EU banks will not be compromised by this appointment.
In light of today’s announcement, Finance Watch calls on the EBA to provide the following information:
- what was the scope and what where the key findings of the assessment of the potential conflict of interest arising from Adam Farkas’s proposed future employment at the Association for Financial Markets in Europe (AFME)?
- what is the list of “topics directly linked to the work he carried out during his last three years of service”?
- how will the EBA’s Board of Supervisors monitor the conditions it decided to apply to his future employment?
- Public trust in the EU’s institutions is damaged by the impact of excessive corporate lobbying. This is especially the case in financial services.
- In line with the EU’s democratic values, its public institutions should act to reduce lobby imbalances, not worsen them.
- The EBA has been criticised for the pro-industry make-up its advisory groups and found guilty of maladministration by the EU Ombudsman in the way it constitutes those groups.
- EBA’s reputation, integrity and independence from the financial industry is critical to its ability to fulfil its mission.
- Bank lobbyists have already started lobbying to weaken the regulations introduced after the financial crisis. This appointment could accelerate that dangerous swing of the regulatory pendulum.
- EBA’s new chair, Mr Campa, was himself recruited from a large bank, where he worked as its chief lobbyist. Approving Mr Farkas’s trip through the revolving door is one of his first significant announcements.