Speaker: Irene TINAGLI (Italy — Partito Democratico)
Political group: Group of the Progressive Alliance of Socialists and Democrats in the European Parliament
Date: 2020-01-16
Debate: Institutions and bodies in the Economic and Monetary Union: Preventing post-public employment conflicts of interest (debate)

  Irene Tinagli,  author. – Madam President, on 17 September 2019, Mr Adam Farkas announced his resignation from his position as Executive Director of the European Banking Authority (EBA), which will be effective on 31 January 2020 to become, starting on 1 February 2020, the CEO of the Association for Financial Markets in Europe (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 the 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 interactions with the EBA.
In compliance with the staff regulations and ethical 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 leaving the EBA. However, the restrictions on Mr Farkas’s future employment do not seem either realistic or enforceable. Unless Mr Farkas simply becomes AFME’s poster boy, I cannot really 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 enforce that or control that? Who’s going to do that? So, for this reason, we call for a review of this decision by the EBA Board of Supervisors. Sadly, Mr Farkas’ is not the first case, and will probably not be the last, of a post—public employment job in the private sector that poses evident problems of conflicts of interest, but we absolutely must act to ensure that this is the last. I really hope that this 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 not only undermine the credibility of the individual engaging in such behaviour, but 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 institutions is the backbone of democracies. So we shall not tolerate our European institutions and agencies’ credibility crumbling just because of some individuals’ interest, and we should always remain vigilant in making sure and guaranteeing that they are not influenced by private interest.
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, and also to put in place a harmonised legal framework, which should include an extension of the possibility to block professional moves 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 EU agencies concerned decide for 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 unanimously by Members in the Committee on Economic and Monetary Affairs (ECON) with no votes against and no abstentions. I hope this is a clear signal and that the plenary widely supports the resolution as well.