Ethics and governance in the European Financial centers

GRECO addendum to the Compliance Report on Luxembourg (Second Evaluation Round) adopted by GRECO at its 38th Plenary Meeting (Strasbourg, 9-13 June 2008) is online.

Better late than never.

GRECO notes that the Luxembourg authorities have mentioned a number of projects initiated, including several Bills, which might help guarantee the complete implementation of the aforementioned recommendations. GRECO acknowledges that the progress of several of these initiatives as reported, including the Bill geared to guaranteeing general access to public documents and that on introducing criminal responsibility on the part of legal persons, constitutes a major step forward as compared with the situation described in the Compliance Report. Nevertheless, GRECO
notes that these two Bills have not yet been completed and consequently that over half of the recommendations to Luxembourg remain only partly implemented. It therefore asks Luxembourg to do its utmost to complete the projects mentioned in this report in order to guarantee complete
implementation of these recommendations. The authorities may wish to report the subsequent progress to GRECO in due course.

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“Despite the challenges posed by the continuing credit crunch particularly, in developed markets, PwC’s results held up well, and all of our lines of business and firms continue to grow.”

Samuel A. DiPiazza Jr, CEO PricewaterhouseCoopers International in a press release.

I find it indecent that in the current financial mess with probably some auditors' responsibility whatever firm, what counts for PwC should be growing i.e. making money. Dont't you?


What about the IFAC warning ?

“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"

Mr DiPiazza does not call for transparency and integrity in the press release.

I am sad of that.

A couple of questions are online on Fortis Luxembourg Website. One is very interesting.

Is banking secrecy intact now that the state has an interest in the bank?
Yes. Under the legislation governing the banking sector in Luxembourg, no shareholder has the right to obtain information concerning the bank's commitment to a particular client. Representatives of the state acting in a management capacity or as members of the board of directors may have access to some information, but are themselves subject to the rule of banking secrecy. They would thus be liable to the same criminal penalties as any other agent of the bank if they used such information for any purpose not directly relating to the bank.


In other words, in the current financial mess because of the lack of regulation and of the failure of " the soft law" the most important for professionals in Luxembourg is to ensure that this criteria of tax haven remains for the clients as Luxembourg is not compelled to communicate its clients'data and has no responsibility to control if the tax payer is honest (See Lucien Thiel's doctrine).