Ethics and governance in the European Financial centers

Fernand Grulms, who chairs LFF, published an interesting article in German to fustigate the study published by the Cercle de Coopération and fustigate experts or bloggers, of which myself.

His article is very telling.

He uses the usual smear tactics: take one detail out of the discussion such as an error, a bad translation or faulty grammar, blow it up into a major, major flaw, and use it as a demonstration that the whole study, argument, article or whatever is peinlich, peinlich, peinlich. You don't have to address the real issue anymore.

But the issue remains as there is no corrective action and may explode later…

But the issue remains and may explode later...

He says: "Alle Unzulänglichkeiten, Falschaussagen und Fehlinterpretationen dieser “Studie” darzulegen würde den Rahmen dieses Beitrags sprengen. Dennoch war das Manuskript ein gefundenes Fressen für selbsternannte Experten und  Blogger, die dieses sofort ungeprüft und unkritisch zum Anlass nahmen, den Finanzplatz Luxemburg (abermals) durch den Dreck zu ziehen."

(Freely translated: To expose all shortcomings, false statements and false interpretations of this “study” would go beyond the scope of this contribution. However this manuscript became a feeding frenzy for all self-proclaimed experts and bloggers, who seized the opportunity to use it immediately, without critical questioning, to smear the Luxembourg financial center (again). )

Fernand Grulms fustigates self-proclaimed experts and bloggers.

ABBL’s opinion in the framework of the transposition of the Second Directive already fustigated in 2003 the "critiques des spécialistes autoproclamés de l’étranger" (free translation: critics from self-proclaimed specialists abroad).

I will only state that most self-proclaimed professionals in Luxembourg did not see that the fight against tax havens was serious and did not anticipate changes.

He concludes "Dieser ist in den vergangenen Monaten in ausländischen Medien häufig angegriffen worden, nicht selten waren die Vorwürfe völlig aus der Luft gegriffen. Dass nun luxemburgische ONGs ebenfalls auf diesen Zug aufspringen, ist mehr als bedenklich. Dass sie sich dabei auf derart unseriöse “Studien” stützen, ist mehr als nur peinlich. Und dass sie dafür auch noch öffentliche Gelder ausgeben – denn besagte nicht-Regierungsorganisationen werden auch mit luxemburgischen Steuergeldern finanziert – kann man als skandalös bezeichnen"

(Freely translated: It (the financial center) often came under attack these past months in foreign media, and quite often the criticism was pure invention. The fact that Luxembourg NGOs now also get onboard that train is more than questionable. The fact that they thereby use such un-serious “studies”, is more than embarrassing. And the fact that they spent taxpayers’ money on this – because these NGOs are also funded with tax payers’ money – is outright scandalous.)

This means that there cannot be any public financing for those who question the dysfunctions in Luxembourg. I kew it.

The organization for NGOs lives among others from public Luxembourg taxpayers money. So does LFF. It might be that an argument by the ONGs can be defeated and contradicted. Then LFF should do it.

But what if LFF promotes and supports faulty policies that will eventually hurt Luxembourg's reputation much more than a study by a charitable organization, because clients' money can be lost?

See for instance the analysis for investor compensation schemes that will be in my guide.

Figures (in EUR)

As far as investors are concerned, the Directive sets a Community minimum level of compensation per investor of Euro 20 000, while at the same time authorising Member States to provide for a higher level of compensation if they so wish. However, certain categories of investors may be excluded by Member States from the scheme's coverage or may be afforded a lower level of coverage. The arrangements for organizing and financing schemes are left to the discretion of Member States.

Clever investors will realize they seem less protected in Luxembourg than in France or Belgium, that both go beyond the directive.

Source:

Luxembourg

France

Belgium

"Aujourd'hui la plupart des pays disposent de textes anti-blanchiment et le blanchiment n'a pas disparu. Ce qui compte c'est la mise en œuvre: quel poids a la personne chargée des vérifications au sein d'un établissement financier, peut--elle imposer ses vues, de quels moyens dispose-t--elle ?" (Thierry Godefroy, CNRS)

(free translation: “Today most jurisdictions have AML texts, and money laundering did not disappear. What counts it is the implementation: which power has the person in charge of the controls within any financial institution, can he or she to impose his or her views, what are his or her means?”

Source : Les Echos