Germany’s federal auditor is concerned that the European Central Bank lacks accountability in its oversight role in the banking sector, according to a parliamentary report obtained by Handelsblatt.
The Federal Court of Auditors, an independent body, in a report submitted to the German parliament’s budget committee, says its E.U. counterpart, the European Court of Auditors, is unable to perform “an extensive review of the bank supervisory functions” at the ECB.
In its report, the federal auditor says bank oversight is an important public function that does not fall under the rubric of central bank independence, noting that national banking regulators like Germany’s used to be fully audited before the ECB took over the responsibility in 2015.
“The federal government should explore all options for closing this oversight gap,” the report said.
The ECB has argued that the European Court of Auditors only has the authority to review the central bank’s efficiency in terms of personnel and budgeting, not its decisions as Europe’s top banking supervisor. The European Court of Auditors has complained in the past that the ECB has used this argument to justify its refusal to turn over some documents for review.
That, according to the German agency, has left a gap in oversight that didn’t exist before 2015, since national regulators in the euro zone tended to be separate from their country’s central banks.
In a statement, the ECB said that it works closely with the European Court of Auditors and has made “a considerable number of documents and explanations available.”
Read the full story in Tuesday’s Handelsblatt Global.