Blackrock auditing European banks: A Conflict of Interest?
The ECB has appointed the financial group Blackrock to carry out checks on banks, although the group holds shares in these banks. Experts warn against a conflict of interest.
Since 2011, the European Central Bank and the supervisory authorities of some eurozone countries have repeatedly engaged experts from Blackrock, which also manages large blocks of shares in most major banks. In addition to the ECB, the central banks in the Netherlands, Spain, Ireland, Cyprus and Greece rely on the consultancy of “Blackrock Solutions”, according to research by Investigate Europe. Those responsible have so far rejected the allegation that the external advisors carry a conflict of interest in official banking supervision – though Blackrock is also the major shareholder of the banks concerned. The ECB assured that the Blackrock consultants were “contractually guaranteed” that they would operate strictly separated from the rest of the Group’s business. But now, for the first time, one of the institutions concerned, the Greek Central Bank, has acknowledged that a separation cannot be guaranteed. Upon request, a spokesman of the Greek central bank governor wrote to Investigate Europe that his authority explicitly excluded Blackrock’s advisors from participating in the “stress tests” carried out in 2015 for the four major Greek banks “because of potential conflicts of interest”.
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