ECB needs greater oversight, accountability: watchdog

As independence limits the ECB's accountability to the public, the bank should compensate by increasing its transparency, publishing more of its decisions and opinions, strengthening integrity rules and becoming more open about the political choices it faces, the watchdog group said.

TI singled out the ECB's role in the Greek bailout, noting that it made political choices instead of merely carrying out technical tasks, putting a strain on the framework which partially exempts it from democratic accountability.

"The ECB's discretionary powers allowed it to put pressure on Greek banks while negotiating bailout reforms with the Greek government as part of the Troika of international creditors," TI said.

"Similar dynamics could play out in the upcoming negotiations with Greece, and with the current recapitalization of Italian lender Monte dei Paschi di Siena, which threaten the euro zone’s current fragile stability," it added.

While the ECB has made progress in transparency with the publication of board member diaries and policy meeting minutes, the ECB's conflict of interest management is flawed and whistleblowing policies are outdated.

"The ECB faces a significant decline in public trust, which alongside its expanded responsibilities put considerable strain on its accountability," TI said.

The ECB, which gave TI access to senior staff, acknowledged the report and said it had already taken some of the recommended steps.

"Some recommendations in the TI-EU report fall outside the ECB's mandate or are not foreseen in the Treaty," the ECB said.

"Some other points have already been implemented, such as publishing decisions, opinions and recommendations as well as providing information on meetings with industry representatives."

(Reporting by Balazs Koranyi; Editing by Hugh Lawson)