Ethics and governance in the European Financial centers

According to Eurostat GDP per inhabitant in Luxembourg, expressed in terms of purchasing power standards 3 (PPS), was more than two-and-a-half times the EU27 average in 2006, while Ireland was nearly 50% above the average. The Netherlands, Austria, Denmark, Sweden and Belgium were between around 20% and 30% above the average. The United Kingdom, Finland, Germany and France recorded figures between 10% and 20% above the EU27 average, while Spain, Italy and Greece were around the average.

The critical question is : to what extent the exceptional figure may result of dirty money in the local economy thanks to proved public or official lax behaviours and poor enforcements of rules that are the visible part of the iceberg?

As I already wrote, to determine wether a country is a tax haven or not, attractive banking or tax regulations are necessary conditions but not sufficient. The point is permissiveness that facilitate the growth.

The leader of the audit in Luxembourg is unfortunately in an awkward position with the IFAC by promoting the growty without ethics. Let's read again what IFAC Deputy President Robert Bunting said on the importance of the tone at the top in finding the right balance between governance, oversight and business growth: "If the CEO’s message is aggressive growth and ‘make the numbers’ first and foremost, then the organization will reflect those priorities. If the CEO emphasizes transparency and integrity, as well as performance, then the organization will respond accordingly". Let's read the latest press release about the growth and what the Territory Senior Partner said early 2007 : "We evolve in a business model based on growth, it remains a preference.". I alredy said a couple of words about the latest press release about growth without ethics.

What is true a the level of a firm is true as well at the level of a financial center: If the communication is aggressive growth and ‘make the numbers’ first and foremost, then the center will reflect those priorities. If the communication emphasizes transparency and integrity, as well as performance, then the center will respond accordingly.

In Luxembourg the communication is definitely aggressive growth and 'make the numbers' in a lax environment.