Ethics and governance in the European Financial centers

Micheline Calmy-Rey made courageous statements that are reported in La Tribune de Genève.

Like the other jurisdictions with banking secrecy, Switzerland could not accept the OECD rules if competitors did not.

But what this Swiss minister adds is worth congratulating her for.
Dans le contexte économique actuel – où nos voisins souffrent d’une crise économique majeure – nous n’avions tout simplement plus le bon produit. Nous ne pouvions plus justifier que des milliards quittent illégitimement les caisses de nos partenaires.
“In the current economic context - where our neighbors suffer from a major economic crisis - we did not have quite simply the good product anymore. We could not justify any more that billions illegitimately leave our partners’ coffers.”

I cannot see such evolution in every jurisdiction on the grey list. For example, yesterday Prime Minister Juncker gave an interview stating that Luxembourg is not the problem and today Jean-Jacques Rommes, who chaired the Luxembourg Banker's association, did not make amends as well.


Both are denying that banks knowingly help to commit fraud, offshore abuses through Luxembourg with many dubious companies, the non implementation of OECD Recs despite an injunction last year, etc.

I do believe that Switzerland will abide by its commitments.

It is very interesting to read again all the annual speeches of Juncker before the parliament.


In particular the one he gave last year whereas the text of Levin, Coleman and Obama was known and that the Liechtenstein scandal took place. In 2008, Angel Gurria stated that "Excessive bank secrecy rules and a failure to exchange information on foreign tax evaders are relics of a different time and have no role to play in the relations between democratic societies"

In 2008, Jean-Claude Juncker

- did not speak about the problems of banking secrecy ("secret" : word missing)

- did not speak about the problems of tax evasion ("évasion" : word missing)

- did not speak about the problems of tax haven ("paradis" : word missing)

- did not speak about the abuses the offshore ("offshore" : word missing, "domiciliation" : word missing)

- did not speak about fraud ("fraud" : word missing)

-…


The former years he had spoken about these issues but definitely ignored their acuity in 2008.



In a nutshell, he did not see or did not want to see that he was up against the wind that now is blowing in his face.

Prime Minister Juncker today gave his annual speech before the parliament.

Some paragraphs of the speech in 2000 are worth reading and sometimes commenting as they illustrate that the Luxembourg authorities do not want to adapt to the reality of today’s world.




En 1999, nous avons eu une loi contraignante sur la domiciliation des sociétés, qui devrait mettre fin aux activités illégales et frauduleuses en marge du secteur financier.
(In 1999, we had a constraining law on the domiciliation of companies, which should put an end to the illegal and fraudulent activities in margin of the financial sector.)

The law is not enforced, as the abuse of offshore scams through Luxembourg remains.



Nous voulons conserver le secret bancaire pour de bonnes raisons. Nous voulons le conserver tant que nos concurrents le maintiendront aussi.
(We want to preserve banking secrecy for good reasons. We want to preserve it as long as our competitors will maintain it too.)

He does not quote the reasons. The only “good” reason why banking secrecy should be preserved is that there are competitors that maintain as well banking secrecy.



Notre économie déborde de force et croît de manière robuste. (…) Nous pouvons être contents de l’état de notre économie et de nos finances. Nous pouvons être contents de nous, mais pas au point de nous surestimer ni de nous dépasser.
(Our economy overflows with strength and grows in a robust way. (…) We can be satisfied with the state of our economy and our finances. We can be satisfied with ourselves, but not to the point to over-estimate ourselves nor to get ahead of ourselves.)



Juncker cannot see the coming crisis.