Earlier today the European obudsman Emily O'Reilly finally caught up with the ECB's "market moving" news from a week ago, namely [4]that ECB personnel selectively leak market moving news to hedge funds in so called "Chattam House" rules closed meetings, ahead of proper public disclosure to everyone: easily the biggest sin a central bank, even one which clearly manipulates markets and monetizes debt, is capable of, one that clearly reveals who a central bank really works for.
The ECB promptly blamed the leak on an "internal procedure error" without clarifying just what the error was that allowed Benoit Coeure to leak ECB strategy 10 hours before it was made public.
As a result, O'Reilly sent the ECB the following letter: [5]
Letter from the European Ombudsman to the President of the European Central Bank concerning a speech delivered by a member of the ECB Executive Board on 18 May 2015
Re: speech delivered by a member of the ECB Executive Board on 18 May 2015
Dear Mr President,
It has come to my attention that, in a speech delivered by a member of the ECB Executive Board on 18 May 2015 in London, potentially market sensitive information appears to have been disclosed to a limited audience.
I asked my services to contact the ECB Compliance and Governance Office to obtain further information. The Compliance and Governance Office replied, notably by drawing our attention to a number of press articles.
I note from these press reports that the ECB has explained that the delay between the delivery and publication of the speech in question resulted from an "internal procedural error" and that the ECB had taken steps to ensure that there would be no repeat of the problem.
I should be grateful if the ECB could provide a more detailed account of the incident in question and in particular of the measures it has taken to avoid a similar incident occurring in the future, so as to enable me to ascertain whether there is any need for action on my part. The more detailed account could also help both the Bank and the Ombudsman to respond promptly and effectively to any complaints that may be made about this matter
I would be grateful to receive a reply from the ECB within the next fortnight. For obvious reasons, your reply should in principle be public.
Finally, as you know, a meeting was held between our services on 11 May 2015 to discuss developments in relation to the ECB's rules on public access to documents and ethics. I will write to you separately about this.
Yours sincerely,
Emily O'Reilly
Strasbourg, 27/05/2015
Good news: moments ago the ECB took a break from its endless scramble to find monetizable debt, and told the obudsman it would respond.
The ECB will respond to the ombudsman and our answer will be public. https://t.co/RKAAfyeQ2h [6]
— ECB (@ecb) May 28, 2015 [7]
The punchline, of course, is that it would do so publicly. Because while the ECB clearly knows who to leak market moving news to first - those billionaire hedge fund managers who serve as a great counterpoint to Europe's 25% youth unemployment - it also has a sense of humor.