Ethics and governance in the European Financial centers

The Council of Europe’s anti-corruption monitoring mechanism, the Group of States against Corruption (GRECO) has published three weeks ago its Second Round Evaluation Report on Cyprus. The report has been made public with the agreement of the Cypriot authorities.

GRECO’s Second Evaluation Round focuses on measures taken to recover the proceeds of corruption, to prevent and combat corruption in public administration and to prevent companies being used to shield corruption.

GRECO addresses a series of recommendations to Cyprus tailored to improve its capacity to combat corruption. They deal, inter alia, with police specialisation in the use of confiscation and interim measures regarding corruption proceeds, citizen’s access to information held by public authorities, the mandate of the Commissioner for Administration (Ombudsman), conflicts of interest in situations where public officials move to the private sector and sanctions applicable to legal persons convicted of corruption offences.

Measures taken by Cyprus to implement the recommendations will be assessed by GRECO in the context of a specific compliance procedure, towards the beginning of 2008.

See Report

Centre for the Study of Financial Innovation (CSFI) has recently completed its 11th Banana Skins survey of leading members of the finance industry to find out their concerns about the soundness of the financial markets.

The survey, sponsored by PricewaterhouseCoopers, puts together a league table identifying potential sources of risks to banks and ranks them by severity. This year’s survey is based on a record 468 responses in 60 countries.

The poll of top financial practitioners, regulators and analysts is dominated by the concerns around over-regulation for the second year running. Fast-rising risks this year also include concerns about commodities, interest rates, emerging markets and equity markets.

As far as over-regulation is concerned, may be this is due to the lack of responsibility of some bankers when writing officially about the AML draft law in their country : "offences such as forgery, use of forgery, false balance sheets, use of false balance sheets or unauthorised use of corporate property should not be included. These are offences with financial connotations which are confused with laundering for the sole purpose of applying exceptional powers to these vague offences.".

After cases like Enron, Worldcom..., nobody may seriously consider use of forgery, false balance sheets, use of false balance sheets or unauthorised use of corporate property as "vague offences" and therefore as usual business behaviour.

Such wording unfortunately supports officially bad management and bad governance in this country depite a communication on proper business conduct.


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In order to avoid drifts, media should be able to raise issues.

A couple of months ago, Didier Laurens, 47 years, who was editor of Monaco Hebdo, was dismissed for critizing some situations involving the authorities in Monaco.

It will be interesting to see how the case will handled at the Council of Europe's level.

Didier Laurens's Blog (in French)