Rules for private investments: ECB tightens code of conduct for central bankers

In the future, leading central bankers of the European Central Bank (ECB) will not be allowed to privately purchase shares or bonds from individual companies or make short-term investments.

Top regulators must also limit their investments to listed, broadly diversified collective investment vehicles such as exchange-traded funds or mutual funds.

The ECB announced this on Friday in Frankfurt.

"The new rules and principles aim to curb the risks of misuse of confidential information and possible conflicts of interest," the euro central bank said.

They are part of a revised Code of Conduct for senior management, which is to apply from 2023 onwards.

Last year it became known that 13 of the 25 members of the Governing Council of the ECB had chosen individual funds, stocks and bonds themselves for their private investments.

In some cases, these were also government bonds that the ECB bought as part of its monetary policy purchase programs or shares in companies whose bonds it bought up.

Ten euro watchdogs had little or no private investments, and two money watchdogs were managed by an independent asset manager.

At the time, European politicians and representatives of non-governmental organizations called for stricter rules of conduct and transparency for the private investments of the euro watchdogs.

The ECB's new code of conduct now stipulates, among other things, that the central bank's ethics committee must be informed at least 30 days in advance of planned transactions worth more than EUR 50,000.

The currency guardians must also name all of their investments from the past calendar year, and the information will then be published on the ECB's website.

In future, they should also hold on to their investments for at least a year - previously it was only one month.

In the case of spouses or children, financial transactions in excess of EUR 10,000 must be reported to the Ethics Committee.

This committee of the ECB has three members who are appointed by the 25-strong Governing Council.

He currently includes the two former councilors and former central bank governors of Ireland and Finland, Patrick Honohan and Erkki Liikanen.

The third member is Virginia Canter, who previously advised the International Monetary Fund (IMF) on ethical issues, as well as US Presidents Bill Clinton and Barack Obama.