Wednesday 17 January 2018

Emily O'Reilly demands answers from ECB on market speech

European Ombudsman Emily O'Reilly
European Ombudsman Emily O'Reilly
Donal O'Donovan

Donal O'Donovan

The European Central Bank has been taken to task by European Ombudsman Emily O'Reilly after one of its most senior officials disclosed market moving information to a select group of money managers at an event in London earlier this month.

The ECB has already accepted that an error occurred in relation to a speech by its executive board member Benoit Coeuré at an event in London on May 15, when he revealed the ECB could step up its bond-buying programme in May and June. The speech was delivered to an audience of around 100 including hedge fund managers and investment bankers at a dinner that followed an event at the five-star Berkeley Hotel in London.

The speech was only circulated to the media and the rest of the market the following morning, putting those who heard it first hand at a potential advantage.

The contents of the speech are credited with big swings in bond, share and currency markets on May 18.

Normally, such speeches are published at the same time as they are delivered, often after being circulated in advance to the media.

It didn't happen last week due to an internal error, the ECB has said.

However, Emily O'Reilly, inset, the former Irish Ombudsman who is now based in Strasbourg, has asked for further information.

"It has come to my attention that, in a speech delivered by a member of the ECB Executive Board on 18 May 2015 in London, potentially market-sensitive information appears to have been disclosed to a limited audience," she said in a letter to ECB President Mario Draghi.

"I note from these press reports that the ECB has explained that the delay between the delivery and publication of the speech in question resulted from an 'internal procedural error' and that the ECB had taken steps to ensure that there would be no repeat of the problem."

"I should be grateful if the ECB could provide a more detailed account of the incident in question and in particular of the measures it has taken to avoid a similar incident occurring in the future, so as to enable me to ascertain whether there is any need for action on my part."

She has given the ECB chief two weeks to respond, and requested that the reply should be made publicly "for obvious reasons."

Signing off the letter written yesterday Emily O'Reilly said she would separately be writing to follow up on a meeting held with Mr Draghi on May 11 in relation to the ECB's rules on public access to documents and ethics.

She has previously criticised the ECB refusal to publish the so called "Trichet Letters" sent to the late Brian Lenihan in the run-up to the 2010 bailout here, which were eventually released last year.

Irish Independent

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