Commission's advisers on financial markets: bankers only?

ALTER-EU's new report, 'A captive Commission – the role of the financial industry in shaping EU regulation' which was launched last week, shows that most of the so-called 'expert groups' advising the EU Commission on financial market regulation are dominated by industry lobbyists. More than 80% of the non-governmental 'experts' in these advisory groups represent big banks and investment funds.

During the launch event, Poul Nyrup Rasmussen (president of the Party of European Socialists and former Danish Prime Minister) called this situation is “a disaster for democracy”. Dennis de Jong,United Left MEP and member of the parliamentary committee on the crisis, pointed out that, unlike big banks - “small cooperative banks and 'green banks', have no voice in Brussels and their views are ignored”. Their role in the Commission's expert groups is marginal. Sven Giegold, Green MEP, and a member of the Economic and Monetary Committee of the European Parliament, added that while in today's “autistic economics” it might be hard to find experts committed towards the public interest and without financial links to the industry, the Commission doesn't even try. There are independent experts out there, including academics that predicted the crisis and NGOs with elaborate proposals, but the Commission chooses not to invite them to join expert groups and to stick with the giant banks.

While MEPs from different political groups are deeply concerned about corporate capture of Commission advisory groups, the Commission seems to be in denial. When asked by the EUobserver to comment on the findings of the report, a Commission official stated that "if you want financial advice you don't ask a baker". Does the Commission really, even after the biggest crisis in 70 years, think that advice on how to regulate financial markets can be left to the big banks and investment funds themselves? The ALTER-EU report shows how the banking lobbyists invited by the Commission to join its advisory groups have used their privileged access to lobby for their own narrow commercial interests, contributing to the inadequate regulation that contributed to the financial collapse.

No less convincing was the Commission's second argument against the ALTER-EU critique: the report, a Commission official argued, is 'unfair' because it 'concentrates solely to the financial sector'.

This would imply that it is not a problem if a whole area of decision-making, like financial markets, is captured by special interests. This position hardly seems defensible. But the Commission's response also ignores the evidence provided by ALTER-EU previously which shows that the corporate capture of Commission 'expert groups' is a widespread problem. ALTER-EU's position is that corporate-dominated advisory bodies are unacceptable and that the Commission should dissolve them or radically change their composition.

Commissioner McCreevy, responsible for financial market regulation, earlier this year stated that listening too much to the lobbyists with the biggest budgets was one the reasons that the devastating and continuing crisis happened. Were these empty words or will the Commission now act to end the scandal of powerful advisory groups being controlled by big banking lobbyists?