ECB enlists private-sector consultants to increase people efficiency
The European Central Bank (ECB) has long made recommendations on how Europe's economy could work better. Now it is asking for some advice for itself.
As the institution's to-do list lengthens to include new asset buying and bank supervision, its president, Mario Draghi, has asked consulting firm Egon Zehnder to review its procedures to improve efficiency, three sources familiar with the issue said. The study started this year with a staff survey and interviews with senior management, the sources said, asking not to be identified as the issue is not public.
Sixteen years after its foundation as the central bank for the euro, the ECB's duties have swollen far beyond pure monetary policy. Egon Zehnder's review mirrors an exercise undertaken for Bank of England (BOE) governor Mark Carney by McKinsey & Company in 2013, which fed into a three-year plan to fuse departments and improve coordination.
Egon Zehnder has presented preliminary findings from its "360-degree review" to the bank's management on the issues it was asked to address, which range from organisational structure to leadership and mentoring, one of the sources said.
The process will continue in the next two months with further meetings to formulate concrete proposals for change, the person said, adding that the remit does not include examining budget issues.
A spokesman for the ECB declined to commen, while a spokesman for Egon Zehnder said the consulting firm does not comment on companies or individuals, whether they are clients or not.
During a financial crisis that almost splintered the single currency, the ECB became co-adjutant of bailouts from Spain to Ireland as part of the "troika" with the European Commission and the International Monetary Fund. It contributes to the global regulatory financial overhaul on panels including the Financial Stability Board, and has intervened in asset markets from government debt to securitised loans.
The ECB's biggest expansion of powers came into force this month when a new pillar of the central bank, the Single Supervisory Mechanism - which has about 1,000 new staff - took direct responsibility for monitoring the region's biggest banks.
When the region's planned Single Resolution Mechanism for dealing with failing lenders starts work, the ECB will have a role in that, too.
The review is the first major exercise of its kind at the Frankfurt-based central bank since 2005, when the central bank created new functions within existing directorates and merged others. The institution previously hired Egon Zehnder in 2013, paying €2.1 million (about HK$20.1 million) for recruitment services, according to the ECB website.
Employees across departments have collaborated to respond to an email sent as part of the Egon Zehnder survey that asked where organisational weaknesses lay, one of the people said.
The review is also aimed at reducing the load of administrative work that has to be carried out by the central bank's six-person executive board, the sources said.
Some BOE employees described the British central bank as "hierarchical" and "slow-moving" in McKinsey's 2013 survey, and staff engagement was listed as one of the factors that rankled them the most.