Ethics and governance in the European Financial centers

I went through the Société Générale's website to read pages relating to compliance, ethics and CSR

There is a very interesting page about tax havens to repudiate clearly the use of such financial centers: "Société Général has defined strict rules to avoid setting up in those countries considered to be tax havens in the OECD or blacklisted by the FATF."

But the last paragraph clearly cancels the commitment of the previous one : "However the group does not rule out working in these countries providing they already have an effective banking and financing sector that meet the economic needs of a local or international customer base, as is the case in Monaco for example."

The blacklist is empty and every country that is considered as a tax haven has anyway an effective banking and financing sector that meet the economic needs of a local or international customer base.

Tax havens are definitely supported by everyone despite official statements to repudiate them.

A bank cannot afford to be out of the business in a financial center including tax havens.



Banks have clear but pragmatic ethical rules.

Some people may disagree with my choice not to condone ethical issues: these people want to save brands' reputation.

That is the reason why the common attitude is not to tighten up the ship because of the reputation.

Self regulation of a profession (bankers, auditors) is agreement between fellow professionals to deny or hush up issues.

The consequence is that the root causes of these issues are never corrected and therefore the reputational risk is going on and even growing as dishonest professional are definitely not repudiated and may feel supported in their drifts.

This phenomenon is particularly visible and critical in small centers like Luxembourg, the Isle of Mans or Jersey.

Such small centers are particularly vulnerable in a world of transparency and communication.

PwC's 11th Annual Global CEO Survey examines how CEOs perceive the business environment in which they are operating, and how an increasingly connected world affects the way their companies function and achieve success. It also explores the impact of an increasingly connected world on the way in which companies work, grow, deal with risk and ultimately achieve business success.

When looking for some critical keywords relating to the reputational risk, it appears that some keywords are missing in the report : ethics, ethical, deontology. There are 3 times the word integrity and there are 13 times the word "compliance".

This word is a charade in financial institutions. When reading the Société Général's website it is stated:

At Société Générale, compliance is regarded as a positive factor that actively contributes to the expansion of the business. It is seen not so much as a series of constraints and restrictions, but rather as the concrete implementation of a set of values that need to be adopted by all the staff, whatever their level of responsibility.

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