Belgium: The European Central Bank is tightening rules on officials’ personal investments after a scandal at the Federal Reserve over private transactions prompted similar moves there.
Members of the ECB’s Governing Council and Supervisory Board will only be allowed to buy “publicly listed, broadly diversified” products such as exchange-traded and mutual funds, meaning they’re barred from investing in individual stocks and bonds of single countries.
Officials will also be required to hold on to their investments for one year, compared with one month under previous regulations, the ECB said Friday in a statement.
“The amendments to our Code of Conduct carry the full support of all high-level ECB officials and are a strong sign of our unwavering commitment to the ECB’s public mission, which is vital to secure the trust of the Europeans we serve,” ECB President Christine Lagarde said.
“While the current Code has proven to be solid and effective, the new rules will bring the ECB’s ethics standards to the next level and ensure that we remain among the leading institutions in this area,” she said.
The rules taking effect on January 1 resemble those unveiled by the Fed last year following revelations over unusual trading activity by some of its top policy makers during the central bank’s response to the pandemic.
The changes come after inflation in the euro area rose to a record high, pushing the ECB into the most aggressive monetary-tightening push in its history.
Securities that ECB officials already own but wouldn’t be allowed to buy under the new rules may be kept as legacy assets, though no further purchases are permitted and any sales will have to be approved by the Frankfurt-based institution’s ethics committee.
“The new rules and principles aim to mitigate the risks of misuse of confidential information and possible conflicts of interest,” the ECB said. “The amendments to the rules for private financial transactions tighten the current regime with the aim of enhancing the ECB’s accountability and transparency.”
