Ethics and governance in the European Financial centers

The Octopus Interface Conference (20-21 November 2006, Palais de l’Europe, Strasbourg, France ) provided a platform for more than 120 public and private sector experts from 45 countries, international organisations, non-governmental organisations, research institutions and the media to identify the risks that corruption poses to the future of democracy in Europe, to share good practices aimed at preventing corruption from undermining democracy, and to determine further efforts that should be undertaken to meet the challenges ahead.
The following issues were on the agenda :
- Political finance
- Lobbying
- Conflicts of interest
- Corruption, justice and democracy
As far as financial centers are concerned, there were one attendee from the UK (university) and one from Switzerland (university). But there were nobody from the other centers.

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When looking the communication for the financial center in Luxembourg and the communication of many companies located in Luxembourg, it appears that professionals focus on the steady, sustainable growth of the center. Actual "Red flags" are ignored or denied because of the current growth.

But it is important to focus on long-term business issues as achieving quality in production and developing good relations with stakeholders (clients, staff, suppliers and the community), and not just on short-term results that are figures.

As Kenneth Blanchard said, "Managing only for Profit is like playing tennis with your eye on the scoreboard and not on the ball" (K. Blanchard, The power of Ethical Management. Ballantine, 1988, p. 109).

While professionals were focusing on the scoreboard, they have not seen the paradigm shift and the international requirements for a credible business ethics. I am pragmatic: I am just saying that ethical values that are stated must be credible i.e. not contradicted by facts all the more if facts are official and public, which is unfortunately the case in Luxembourg as shown in many previous articles.

That is the reason why the center may be a risk for the reputation of head offices as it is a weak link.

Over the past few years, the financial, monetary and banking fields have become some of the most fundamental and rapidly changing within the EU legal corpus. Indeed, the introduction of the euro has facilitated a greater efficiency in the functioning of financial markets and the legislative program established by the Commission’s 1999 Financial Services Action Plan (FSAP) added to this creation of a true European reflex. In addition, new legislative priorities were announced in the 2004 report on the FSAP and, during the course of last year, the Green Paper on Financial Services (May 2005) launched a debate on these priorities. As a result, the recent White Paper (December 2005) has come to mark the steps still to be taken to build a real European integrated capital market. Within this context, this seminar will provide a forum of discussion and exchange of views on the state of progress of a number of legislative measures within this area (the achievement of Single European Payments Area, measures on the completion of financial retail and wholesale market, initiatives in the fight against financial crime, etc.), their status of implementation and potential future initiatives.
The seminar will bring together high-level experts, practitioners, and other interested professionals in a forum designed to facilitate the exchange of views and to offer the opportunity to raise and answer critical questions of participants as well as speakers.
The seminar is aimed at EU officials, national civil servants, lawyers and other professionals, in particular from private banking and financial institutions or public authorities and bodies in these sectors, as well as others whose work deals with the addressed aspects of the EU acquis.

The seminar will take place in Luxembourg on 16-17 November 2006.


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