Banking Crisis
Luxembourg Minister Wants Bank Secrecy Redefined, Not Abolished - Report
Banking secrecy needs to be redefined, but abolishing it abruptly is not in Europe's interest, Luxembourg’s deputy prime minister told Swiss newspaper Sonntag. His comment came amid renewed debate over the issue sparked by the US tax probe into the operations of UBS.
"Old school Luxembourgers say that without banking secrecy, our country would not have gained such importance as a financial centre," Jean Asselborn, told the paper.
"But in the 21st century, banking secrecy cannot be the only instrument with which Luxembourg drives its economy. Therefore, we need perhaps to redefine banking secrecy and little by little to expand on the advantage of competence," he said.
Last week, UBS provided the US government with data on 250 to 300 clients suspected of using offshore banking to commit tax fraud.
But a day later Washington upped the ante by filing a lawsuit to try to force UBS to disclose the identities of 52,000 further US customers who allegedly evaded taxes, sparking debate about the "end" of banking secrecy. UBS says it will resist attempts to extract the data.
Like Switzerland, Luxembourg has strict banking secrecy rules protecting client confidentiality.
Mr Asselborn warned that it would not help the European Union to abolish banking secrecy suddenly, as money could flow out of Europe.
He warned it could also lead to job losses.
"We have 150,000 workers who cross the borders daily to work; 73,000 come daily from France, just as many come from Germany and Belgium. If the banking centre is destroyed, it is a disadvantage for not just Luxembourg, but the whole region," he said.
He also condemned critics for targeting Switzerland and Luxembourg in the rush to assign blame for the market downturn.
"I am disturbed by the debate that concentrates on Switzerland and Luxembourg in the search for the cause of the financial crisis. It would be fatal and wrong to look for those guilty for the financial misery here.
"How banks in the US dealt with credit ... has nothing to do with Switzerland or Luxembourg, and nothing to do with banking secrecy."