Ethics and governance in the European Financial centers

Didier Mouget, PwC Luxembourg Territory Senior Partner, was invited by Paperjam TV to comment PwC results, the crisis and the consequences of the current fight against tax havens.

He explained that the crisis in an opportunity for auditors to make more money and continue the growth because the provide they provide confidence. I do not agree with that because auditors, especially in a small jurisdiction like Luxembourg, are not independant enough from their clients who pay for the audit and ignore business ethics. That is the reason why those who state that audits of banks should be directly conducted by the regulators on a real time basis and external auditors of banks must not act as consultants to the banks or the directors are probably right as auditors seem incorrigible.

What he says about the current fight against tax havens is worth analysing as well.

In his opinion Luxembourg is not a tax haven because it has rules, which is not the case in some exotic jurisdictions with no rules or poor rules.

Unfortunately like many professionals in Luxembourg, he disregards dysfunctions of the center including those that are a direct threat for chartered accountants and registered auditors because of accounting actors that are controlled neither by the OEC (institute of chartered accountants) nor the IRE (institute of registered auditors ) and that create risky companies.

Above all he explains that if some tax havens are closed - Luxembourg not being one of them - it would be more business for Luxembourg. This is what I said.

But, it would be as well more reputational risks as there is no will to correct dysfunctions or issues that are condoned.

And I find it strange that a small country that find the money for its promotion with LuxembourgForFinance for exemple, should be unable to invest in the means required to correct dysfunctions.