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Secrecy debate could hurt Austria: central bank chief

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(Globalpost/GlobalPost)

The head of Austria's central bank warned Saturday that debate about the country's banking secrecy risks hurting the reputation of its financial system.

"Austria is certainly not a tax haven," Ewald Nowotny told reporters at the World Bank and International Monetary Fund annual spring meetings in Washington.

"It's important that others also see it this way."

"What's important to us as the central bank is that Austria's banking system as such is recognized as being stable and serious."

He added that it would be "very dangerous" if "unfounded" doubts arose from such discussion.

The Alpine republic has come under fire as the European Union's last country to hold onto banking secrecy after Luxembourg announced it was prepared to lift its own regulations on the matter, amid a region-wide push to halt tax evasion.

Finance Minister Maria Fekter has repeatedly said Austria will not introduce the automatic exchange of banking data, which France and others want to police offshore bank accounts for tax reasons.

Recent EU talks in Dublin, Fekter described the idea as "a massive intrusion of privacy".

Instead, she has pointed the finger at "the real tax havens in the EU," citing the Channel Islands, Gibraltar, and British territories Cayman Islands and Virgin Islands, as "the real hot spots for money laundering and tax evasion."

A Gallup poll for the daily Oesterreich earlier Saturday found only 18 percent of Austrians wanted to maintain the strict banking secrecy policy.

A total 31 percent wanted it to be lifted completely, while 44 percent supported Chancellor Werner Faymann's compromise solution of an automatic exchange of banking data for foreign account holders but not for Austrian depositors.

On Friday, the Group of 20 economic powers meeting in Washington urged the global adoption of standards for sharing account information in an effort to fight tax evasion and curtail banking secrecy.

"More needs to be done to address the issues of international tax avoidance and evasion, in particular through tax havens, as well as non-cooperative jurisdictions," the G20 said in a statement that urged all countries to accept the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, a framework for the sharing of banking data.

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http://www.globalpost.com/dispatch/news/afp/130420/secrecy-debate-could-hurt-austria-central-bank-chief