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You saddle today and ride out tomorrow

Almost three years ago, I had warned the professionals and the politicians in Luxembourg of the paragigm shift:

This is what I wrote :

To ensure the sustainability of the financial center, Governing authorities must be aware of the changes to the geopolitics and the geoeconomics : we live at a time of transparence and governance with various programs (OECD, World Bank...).

Governing authorities must ask questions and accept questions especially on compliance issues. They must tighten up the ship on issues all the more than there are alternative financial centers for investors and head offices of banks. Otherwise they weaken their international credibility.

The failure to ask or to answer questions allows these authorities (either political or professional) to operate with a distorted sense of reality. In fact, Finkelstein calls companies that are unable to question their prevailing view of reality zombies. A zombie company, he says, is “a walking corpse that just doesn’t yet know that it’s dead—because this company has created an insulated culture that systematically excludes any information that could contradict its reigning picture of reality”.

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07:08 Posted in Luxembourg | Permalink | Comments (16)


Additional proof if required that "there are none so blind as those who will not see"!!

Keep up the good work.



Posted by: Charles O'S | 03/11/2009

Ethics in business? OK! Let's discuss arms trading. US, UK, Germany and France should be well situated to assess their own ethical position in providing military equipment into conflict areas.

BTW: forgot the Elf-Aquitaine story?

Posted by: George | 03/11/2009

George, you are right.I have never said that the US, the UK, Germany and France are exemplary countries :- some like France sell weapons and for this purpose secrecy in some jurisdictions may be sought,- they have as well their "in house" tax havens : Monaco and Andorra for France, some Islands for the UK, Delaware for the USA.
The difference is that in the US, the UK, Germany and France there are watchdogs and there is a political debate against the abuses.

Posted by: Jérôme Turquey | 03/12/2009

What difference? What watchdogs? What debate? - Debate under Bush? Under Sarkozy - streamlining the press?

You forgot Italy and Berlusconi!

Ha Ha

Posted by: George | 03/12/2009

The REAL difference is that the US, the UK, France and Germany are big countries. They give a hack in ethical behaviour.
When they see the GDP per capita figures, they get their ideas.
Sarko is under internal pressure, there are elections in Germany (25.000 people in Opel!) and Madoff is a US scandal.
So what? - Luxembourg has grown to become No2 in the fund industry.
These are all facts and circumstances that have NOTHING to do with fiscal issues or banking secrecy!

Posted by: george | 03/12/2009

I have no problem with the fact that Luxembourg is successful. The problem is the permissiveness in the jurisdiction that creates the conditions for various frauds.

Can you tell me the address of the TI chapter in Luxembourg?
Can you tell me the web address of the balance sheets database of luxembourg-registered firms?
Can you tell me the web address where I can find judiciary judgements online in Luxembourg?

Luxembourg is collapasing because, like companies observed by S. Finkelstein, it has unfortunately created an insulated culture that systematically excluded any information that could contradict its reigning picture of reality.

The first steps of what is hapening today were visible since 2004

Posted by: Jérôme Turquey | 03/12/2009

The point is not that you (or me) do not have a problem with Luxembourg's success. No one cares about my opinion.

It's the big countries who want to impose their rules. It's about money. And the present crises is the occasion they have been dreaming of to provide them with a reason to put on pressure.

It's an illusion to believe this is all driven by a wish to improve ethical standards! Peace and freedom all over the world?

Sadly enough Luxembourg's officials have been naive in thinking they could "explain" their views. Remember post-communist / neo-socialist Montebourg's trip to Luxembourg?

- TI is an NGO like Greenpeace - no one (and if, who?) prevents them from opening a branch in Luxembourg ...
- Financial information has to be filed with the Registre de Commerce et des Societes which is a public register (and has always been).
- What is an online judgement register good for? Check my neighbour?

Why not give up ALL professional confidentiality? Doctors, priests and journalists in the first place?

Posted by: george | 03/12/2009


I am not against banking secrecy but against the drifts and abuses in a permissive context.

There is a paragigm shift that was visible as of 2004. Unfortunately professionals and politicians in Luxembourg forgot the Lion to prefer the three monkees.

To open a TI chapter there should be people interested in the fight against corruption located in Luxembourg. Noone is.
Financial information is not available and this was officially admitted by the STADEC. Noone wants.
An online judgement is a criterion of a healthy democracy as justice should be public.

PM Juncker compared today banking secrecy with confessional secrecy which is bold. There is no tradition of banking secrecy in Luxembourg.

Let me ask you a question. Some professionals in Luxembourg explain that should banking secrecy be given up there would be a prejudice for the juridiction.
Don't you think it is the same level of arguments that some people might use in a country with child work as it provides money for families?
Don't you think it is the same level of arguments that some people might use in a country with child prostitution as it provides money for families?

Posted by: Jérôme Turquey | 03/12/2009

Good! - Now we have the discussion on the level where I wanted it.

There is always a big outcry when it comes to data protection and possible violation. Banking secrecy is data protection: not more, not less!

No one is interested in TI in Luxembourg? Ever tried?

Financial info IS available, maybe not through a mouseclick. Justice too is public - but there is absolutely no need to publish court trial on the net! - That might be of interest on US TV and maybe there only in Texas. You want me to know that you have been fined for driving drunk?

What I clearly mean by "money" is not proceeds from child work or child prostitution - and you finally admit that you consider banking being of the same "ethical level" (!).

What I mean is that the big countries have large budget deficits they have to explain to their electors. As they can't, they blame it on someone else.

It's as easy as that - and now is the moment.

Don't tell me that if banking secrecy is given up in Luxembourg all fiscal problems in the EU / OECD will be solved!

I wish you a nice time!

Posted by: george | 03/12/2009

I agree with a couple of ideas you said :
- the big countries have large budget deficits they have to explain to their electors. As they can't, they blame it on someone else. It's as easy as that - and now is the moment.
- if banking secrecy is given up in Luxembourg all fiscal problems in the EU / OECD will be not be solved.

Many professionals in Luxembourg are like a fish in its bottle as they have a distorted sense of the world through the bottle.

I am not against data protection but there is an international principle in international law : states taxes their citizens and no jurisdiction should support tax evasion against the other jurisdictions.

Posted by: Jerome Turquey | 03/12/2009

Today is your day!

As from now the world has become better: no more support of tax evasion!

Or did I get it wrong?

Posted by: george | 03/13/2009

The world has probably not become better, but some jurisdictions had gone too far by implementing business over ethics.


Posted by: Jerome Turquey | 03/14/2009

George, I totally agree with you. Also, I’ve been reading many of Mr Turquey’s posts in recent weeks, and it strikes me that he is obsessed with Luxembourg.

I mean, if he wants to talk about ethics, why not start with himself? On a blog supposedly about ethical standards in European financial centres, he sure seems to spend a lot of time almost exclusively firing bile at Luxembourg, with an obvious sense of glee and Schadefreude whenever Luxembourg gets negative headlines. All this doesn’t seem very “ethical” to me. In fact, it’s in line with the type of scapegoating that Mr Sarkozy (a real beacon of ethical behaviour, that one :) -- just see Perol & Sarkozy's bullying of the Deontology Commission) has been doing over the past few months.

Indeed, having read through this blog, I get the distinct impression that Mr Turquey holds a personal grudge against Luxembourg. I have no idea who or what has offended him in the past, but the entire blog reads like a personal vendetta against a country and its financial centre.

He also repeats exactly the same argument over and over again – and it seems to be aimed at selling his services as “ethical” risk officer or whatever his job title may be. One of his arguments that is repeated ad nauseam is that the Luxembourg government is “pragmatic”, which I gather means business-friendly here. First, I really don’t understand when being pragmatic has become a bad thing. Secondly, you’d have to be a very a short-sighted and, let’s face it, stupid government not to be pragmatic in transposing or setting legislation. In fact, every government on this planet is pragmatic.

If for the sake of argument, I was to accept Mr Turquey’s argument that Luxembourg is the supposed banana republic he claims it to be, where corruption is rife and the business community dictates legislation, then how about the US for pragmatism: how about getting the whole oil business and arms manufacturing business into the White House (not as lobbyists, mind, but as the actual executive arm!) and start a war on the basis of …..well, a lot of hot air, fictitious threats and contrived proof.

At least this second example really did take place.

Or how about signing tax agreements with Qatar that exonerate Qataris buying property in France from paying taxes on capital gains? Guess what? That also really happened in the oh so "unpragmatic" France, with its army of "watchdogs". I guess the definition of tax haven, apparently like that of pragmatism, is really just a matter of who is holding the gun.

Unfortunately, Luxembourg, because it doesn't have the political clout of a country like France, finds itself staring into the barrel of said gun more often than it cares to.

I usually don’t bother commenting on blogs, but hypocrisy really gets my goat.

Posted by: Jerry Bentham | 03/15/2009


Hi Jerry (if it is your actual name)

1. Yes there has been a focus on Luxembourg recently, as Luxembourg has assumed leadership of a group of tax havens, even inviting them to a coordination meeting to Luxembourg. Though others are named and will be named.
2. Knowing Luxembourg best might be another reason. But then pointing out misbehaviour does not automatically mean hidden agenda or hate. Why not love? And a sincere wish that things change in Luxembourg.
3. Changing things is easier in the White House. Proof is that those you didn't like, are no longer there. Sometimes that is what it takes to change bad habits: change of the guard. That adjustement happens ever again in France. In Luxembourg it is the greatest challenge.
4. The good news: what has been advocated on the blog, is about to happen. No one knows if I have in any way something to do with this change of mind. If so, I should gladly take credit.
5. In its generic sense "Pragmatic" means practical. Practicality can run both ways: in a positive or a negative direction. However in the Luxembourg lingo, it came to describe an obscure system where everyone knows everyone, sees everything and yet doesn't protest when business trumps ethics. Yes, that being said, some would need an outside expert to help correct their ethical challenges.
6. Next blog: Monaco that should follow and even go beyond the good example Luxembourg is supposedly about to set.
7. Anyway this blog made very positive recommendations about what has to be accomplished in Luxembourg (and elsewhere) to make it a clean financial center It could be a model to many and provide excellent reputation and trust. Many blogs and articles recently were just triggered because Luxembourg didn't get out of the (bad) news: Madoff, UBS, OCDE and so on.

See what I wrote in July 2008 : http://ethiquedesplaces.blogspirit.com/archive/2008/07/26/what-is-to-be-done-to-enhance-a-good-reputation-of-the-luxem.html


Posted by: Jerome Turquey | 03/15/2009


Jerry is right. You seem to have quite a distorted view: scandals like Madoff (and Parmalat et al) do definitely not have their origin in Luxembourg. They have nothing to do with unethical behaviour (except Mr. Madoff et al).

Further, I don't understand how "Luxembourg has assumed leadership of a group of tax havens".

From now on, I will waste my time on things funnier than this blog.

Thank you

Posted by: george | 03/18/2009

I have never ever said that scandals like Madoff (and Parmalat et al) have their origin in Luxembourg. But they were facilitated by the luxembourg business environment.

Parmalat has nothing to do with business ethics? Readers of this blog will answer the question after a refresh on the origin of the 8th Directive : http://europa.eu/rapid/pressReleasesAction.do?reference=IP/05/1249&format=HTML&aged=1&language=EN&guiLanguage=en.

Luxembourg has assumed leadership of a group of tax havens by welcoming them on March 8th and by leading a meeting with Angel Gurria last week : see http://www.tagesanzeiger.ch/schweiz/standard/Nach-Druck-aus-der-Schweiz-OECD-passt-schwarze-Liste-an/story/30333049

I am sorry for you but but I do think that the distorted view is not on my side.


Posted by: Jerome Turquey | 03/18/2009

The comments are closed.