ECB petition of our research group discussed in the European Parliament

One thing you can say about the members of our Global Ethics Research Group on Finance and Economics is that they are extremely persistent when it comes to setting an ethical course for European financial policy. They have been committed for years through publications, critical analyses and events to a sustainable and socially acceptable financial policy that takes global issues into account. Only in October, at their conference in Frankfurt with high-ranking experts, they shed light on the credibility, as well as the problems and opportunities, of the ECB’s sustainability strategy. Their persistence is now bearing further fruit: on December 1, a petition launched in 2017 by a member of the Research Group’s Executive Board was discussed and welcomed by the Petitions Committee of the European Parliament.

In the approval criteria for securities and collateral for monetary policy operations with the ECB (see, e.g., Official Journal of the European Union L 91/3, April 2, 2015), no restrictions of an ethical nature were explicitly listed. The terms “sustainability” and “human rights” do not appear in the corresponding guideline at all. This motivated the Würzburg business ethicist Prof. Dr. Harald Bolsinger to examine the securities accepted by the ECB as loan collateral for the first time with regard to ethical controversies. In Bolsinger’s view, the results show an unacceptable regulatory gap, as the securities are associated with numerous ethical controversies that do not meet the EU Charter of Fundamental Rights as a minimum standard. These findings prompted Bolsinger, a board member of the Global Ethic Research Group, to submit a public petition to the European Parliament. The petition was submitted on 08.05.2017 and registered on 15.05.2017 under No. 0429/2017 with the name “Commitment of the European Central Bank to EU Charter of Fundamental Rights”.

“The regulatory framework of the EU Charter of Fundamental Rights has been valid law since the Treaty of Lisbon – also for the ECB!” explains the Professor of Business Ethics & Economics at the Faculty of Economics at FHWS. Since 2017, the EU Petitions Committee has been dealing with the implementation of this simple truth, Bolsinger explains. “On Dec. 1, 2021, the European Parliament’s Petitions Committee will have another opportunity to finally bring justice to all financial market players and make it clear to the European Central Bank that the EU Charter of Fundamental Rights must also be observed in all its transactions.” Sustainability in the financial market cannot be implemented by the commercial banks alone, but requires ” first and foremost a credible central bank that sets a good example instead of talking its way out of it. Not only climate protection is relevant, but all areas that were already bindingly fixed in the Charter of Fundamental Rights in 1999!”

On November 11, 2019, Bolsinger presented research findings on the European Central Bank’s (ECB) fundamental rights compliance to the European Parliament’s Brussels Petitions Committee and appealed to parliamentarians to politically counter the Eurosystem’s ethics blindness. According to his research, about 20 percent of the securities that the ECB accepts as collateral for loans to commercial banks are fraught with serious ethical controversies. The cases range from child labor, forced labor, corruption, tax avoidance and environmental degradation to allegations of terrorist financing and production of outlawed weapons of war. The market volume of the securities under investigation amounts to around 14 trillion euros and thus has a significant impact on the reality of life for EU citizens.

Following a statement by the European Commission, representatives of the political groups in the Parliament commented on the demands of petition 0429/2017, emphasizing its fundamental importance for the sustainable orientation of the European Union and deciding to pursue the matter politically. Thus, Bolsinger’s demands are to be presented to the new ECB management, discussed in the Economic and Monetary Affairs Committee of the European Parliament and in other crucial places. “It must become standard practice for the ECB to report regularly to Parliament on compliance with fundamental rights explicitly for all its assets,” Bolsinger said in his presentation to the Brussels Petitions Committee in the European Parliament. Fortunately, the Committee fully recognized the importance of the issue during Bolsinger’s hearing and declared its intention to take further steps in this direction.