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Secret "Diaries" Show ECB Board Members Met With Banks, Hedge Funds "Days" Before Policy Meetings
Back in May, the ECB's Benoit Coeure told a non-public audience of hedge funds in London that "the central bank would moderately front-load its purchases in its quantitative easing program because of the seasonal lack of market liquidity in the summer."
The reaction was a 50 pips drop in EURUSD.
The problem: this was inside information. It wasn’t released to the trading public until around 8am the next day (London time) when it resulted in a further 150 pip plunge.
As egregious as this obviously was, it didn't surprise us or anyone else who's predisposed to skepticism about the relationship between policymakers and those who essentially gamble on policy decisions. Indeed, it was simply another example of nefarious intermingling between central planners and a select group of private sector operators and came just as Jeb Hensarling began to turn up the heat on Janet Yellen regarding leaked Fed minutes.
Now, As FT reports, "some of the European Central Bank’s top decision-makers met banks and asset managers days before major policy decisions, and on one occasion just hours before, copies of their diaries reveal." Here's more:
The disclosure of the meetings comes at a time of heightened scrutiny of the contacts between central bankers and the financial services industry. Earlier this year, the ECB launched its own review of the issue, setting out new principles for how its officials should interact with the private sector.
The meetings offer a sharp contrast with the Bank of England, which prohibits members of its rate-setting committee from talking to media and “other outside interests” on monetary policy matters in the week before a policy decision.
The diaries show two members of the ECB’s executive board, Benoît Cœuré and Yves Mersch, met UBS bank the day before a two-day policy meeting of the central bank’s rate-setting governing council on September 3 and 4 2014.
Mr Cœuré also met BNP Paribas bank on the morning of September 4, the day the ECB’s governing council surprised markets by cutting interest rates. It also announced it would begin buying private sector assets to save the eurozone’s economy from the threat of deflation. UBS and BNP Paribas declined to comment.
Ok, so was it just banks they met with?
Mr Cœuré met asset manager BlackRock the day before a policy meeting in March this year, when the council unveiled the details of how it would carry out its €1.1tn asset purchase, or quantitative easing, programme. BlackRock declined to comment.The ECB’s vice-president, Vítor Constâncio, and its chief economist, Peter Praet, met Algebris, a hedge fund, at the height of this summer’s Greek crisis, when the governing council held daily conference calls on whether to continue sanctioning emergency loans to keep Greece’s banks afloat.
Got it. They met with everyone. Regularly. But don't worry, they always acted with integrity:
The central bank also confirmed that officials never discuss market-sensitive information in private meetings.
“The quiet period refers to public communication ahead of monetary policy governing council meetings. The same underlying principles — guarding against signalling future monetary policy — are of course applied to bilateral meetings. In any case, no market-sensitive information is disclosed by the ECB in any non-public forum,” an ECB spokesperson said.
Of course not. Nobody at the ECB would leak non-public information to banks or hedge funds. Just ask Benoit Coeure.
In any event, this reminds us of 2010, when the release of Bill Dudley's daily schedules from the beginning of 2009, through September 30, 2010, revealed some amusing, if not very surprising, disclosures. Among them: Dudley's penchant to meet with Jamie Dimon, Vik Pandit and, of course, former boss Lloyd Blankfein. Other meetings include Sullivan and Cromwell chairman, and the banking cartel's personal chief attorney H. Rodgin Cohen. Those are to be expected: after all Dudley has to conduct the New York Fed policy exactly in accordance with Wall Street's expectations, and per Wall Street's recommendations. What is a little more surprising is that on February 9, 2009, Bill Dudley hosted a lunch roundtable with hedge fund SAC Capital.
And so, this is just history repeating itself in the name of facilitating a better "understanding" of central bank decision making. Of course it's far easier to predict the direction of markets when one "understands" these things before anyone else does and in what can only be described as a hilarious bit of irony, the ECB is now set to publish executive board members' diaries - with a three month delay. So just to be clear, the market will get to read about how they were frontrun 90 days later.
Then again, it's all par for the proverbial course...
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I'm shocked! Shocked!
https://www.youtube.com/watch?v=SjbPi00k_ME
Monsieur Coeure should worry about dropping the soap if there were any justice, which is of course an absurd expectation when the "they" dont even pretend to care about propriety any more, so sadly he will continue to be freebe free to drop the soap without worry.
Notice how they didn't meet with Goldman?
That's because GS already knew before the ECB did!
GS gave the order...
They can behave as they wish with impunity. That's the new normal.
Carly Fiorina to confront heckling hosts on The View: ‘Man up!’
http://tinyurl.com/nr5zywf
Truly shocked.
Damn. I shoud have answered that Nigerian email about Draghi calling.
These Central Banksters are at war against the small people.
Their getting bolder every day.
Time to bring back public flogging......
FFS if you're gonna do it don't put it in your diary.
we didn't miss anything. every meeting was the same. there will be MOAR.
Screwtape Diaries
Screwtape Letters, wormwood.
I feel "éCoeuré" (sickened in french) about Mr. Coeuré. Nice ironic name ("Hearted") for a crook, maybe a futur Bond's villain.
The financial world has long since become a mafia. The regulators, banks, major trading houses and central banks all share in the loot. They share luxury homes in the same areas, they vacation with the family at the same Swiss Ski Resorts, they belong to the same exclusive clubs, they belong to the same political parties, they fund the same think tanks to write policy, and issue news stories, they all own major media shares, they all hold major defense industry shares, their same frineds and family sit on all major corporate boards, BUT, if you dare claim collusion of any sort, you are a barking mad conspiracy theorist!
Central banks are the work shop of the elite where they piece together monetary policy designed to transfer wealth to the connected 1% > .
We have insider trading laws where a minion investor, executive, asset manager or pension fund can get nailed for profitting $5,000 / $50,000 / $500,000 / $5 million by using non-public material information. But the Central Bank are permitted to disclose the most sensitive and important macro-level information to their billionairre cronies who are then permitted to fleece the entire market for trillions by consistently front-running the market.
Are we surpirised? No we all know there is a club and we are not in it. When all the smoke clears this small club will be a whole lot smaller. Lots of these insiders are going to meet an ugly end.
Any law which violates the inalienable rights of man is essentially unjust and tyrannical; it is not a law at all."
"Any institution which does not suppose the people good, and the magistrate corruptible, is evil."
-Robespierre
They...don't...care...what...we...think...
Is this this not so obvious as to be a foregone conclusion?
The person who first uttered the phrase “too big to fail” should have had their tongue cut out!
Too Big To Fail is as American as Apple Pie said the Commie Traitor who should have been hung in the public square!
It's like the "Vampire Diaries", but with real vampires
They probably met at orgies organized by DSK.
Paging Dr. Guillotine. Guillotine? Guillotine?
Guillotine?
Everyone knows mega-rich banksters and huge banks own and control the central banks. Anyone who imagines they don't take full advantage is infinitely naive.
End fiat debt and central banks, or they will end humanity.
That's a fact. Your choice.
Where were all the new compliance officers they have been hiring in the financial sector??? I am sure none of these people will get the Martha Stewart treatment or jail.