Luxembourg open to bank secrecy changes | News | DW | 07.04.2013
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Luxembourg open to bank secrecy changes

The recent "Offshore Leaks' scandal has put banking secrecy under intense scrutiny. Luxembourg, whose opaque banking sector is a massive source of wealth for the EU country, says it is open to more transparency.

Luxembourg is ready to make changes to its contoversial tradition of bank client secrecy in order to help fight tax evasion by foreign account holders, the country's finance minister said on Sunday.

Luc Frieden told the German newspaper Frankfurter Allgemeine Sonntagszeitung that his country wanted to "strengthen cooperation with foreign tax authorities," after Luxembourg recently came under criticism from other eurozone countries for its opaque banking system.

"The international trend is going toward an automatic exchange of bank deposit information," Frieden said. "We no longer strictly oppose that."

A massive leak of emails and bank documents exposing a number of prominent figures as tax evaders put the issue of banking secrecy into the headlines.

Interest the country's banks pay out to foreign clients could be one form of data that Luxembourg may be willing to turn over to other countries, Frieden added. He said Luxembourg is not dependent on bank depositers who are trying to avoid paying taxes, and that he wanted people to turn to Luxembourg's banks "not to escape taxation...but because our products and services are better geared to international needs."

Germany 'in close consultations' with Luxembourg

German Finance Minister Wolfgang Schäuble welcomed the remarks, telling the regional daily Saarbrücker Zeitung that Germany would support "every step toward an automatic exchange of information."

"We are in close consultations with Luxembourg and discussed the issue a few weeks ago during a meeting of the German-speaking finance ministers in Berlin," Schäuble said.

Luxembourg is one of the six founding members of Europe's post-war economic alliances, the forerunners to the European Union. It also has the highest per-capita income in the EU, largely due to its banking sector.

Mario Draghi, president of the European Central Bank, said on Thursday that the recent banking crisis in Cyprus "shows that countries where the banking sector is several times bigger than the economy are countries that, on average, have more vulnerabilities."

acb/jr (AFP, AP)