According to the European Ombudsman, the EU banking watchdog should never have allowed its former boss to become the managing director of one of the largest financial pressure groups in the world.
Farkas was the executive director of ABE from 2011 until he was hired by the Brussels-based Association of Financial Markets in Europe (AFME), a position which started in February this year.
The association represents some of the largest banks in the world. Last year it spent up to 4.7 million euros to put pressure on the EU.
"If this decision did not justify the use of the option, provided for by EU law, of prohibiting someone from occupying this post, then no decision would be, "European lawyer Emily O & # 39; Reilly (May 11) said on Monday.
Related Downloads:
O & # 39; Reilly said that the ABE also had not, once notified of the move, immediately removed Farkas' access to confidential information.
When asked to comment, the ABE said it is satisfied that the restrictions imposed on Farkas "to limit the conflict of interest were proportional and proportionate".
These restrictions included a ban on professionally meeting his former subordinates for two years.
Moving from a position of public institutional power to a private position which then seeks to influence legislation is commonly referred to as a "revolving door".
Previously, such conflicts of interest also involved the European Commission, whose former President José Manuel Barroso held a position of responsibility at Goldman Sachs International.
April: Farkas and Danske Bank
The ABE was created to address the role of banking institutions, such as Goldman Sachs, in creating the financial crisis of 2009 that left millions in dire poverty.
Last April, he was put to the test when the ABE board of directors was asked to act on the recommendations of a money laundering scandal in which some 200 billion euros of illicit Russian funds passed through the branch of Danske Bank in Estonia.
The meeting of the board of directors, which invokes Farkas, refused to act
"He chaired this meeting, he was very well prepared and seemed to have a very clear idea of where he was going," said Kenneth Haar of Corporate Europe Observatory, which was among the NGOs that filed a complaint against the ABE.
The next day, a recruitment company approached him on behalf of AFME, according to the European Ombudsman. Farkas officially accepted the position in August 2019, although he only started recently this year.
Since then, the lobby group has held at least four high-level virtual meetings with the European Commission to discuss capital requirements and financial markets in the context of the pandemic.
For its part, the European Commission has declared that the ABE is responsible independently of staff decisions.
Meanwhile, Farkas can be barred from entering the European Parliament for two years to pressure MEPs if he asks for an access card.
Efforts are underway to extend the same restriction to the European Commission, said Paul Tang, a Dutch socialist MEP.
"The Members have already unanimously supported my call to deny Farkas access to the premises of the Parliament and have undertaken not to meet him in his new role. I hope that other EU institutions will do the same, "he said.