BERLIN Nov 8 Liechstenstein's banks are coping
with a clampdown on tax evasion thanks to cost cutting and a
drive to attract new funds, reducing the likelihood of merger
deals, the head of tiny Alpine principality's banking
Liechtenstein was removed from a global black list of
uncooperative tax havens in 2009 when it agreed to help hunt
foreign tax dodgers after data leaked the year before revealed
hundreds of wealthy Germans had hidden assets in its banks.
Liechtenstein Bank Association President Adolf E. Real said
on Thursday the country's 16 banks have been working closely
with the government to reverse its image as a haven for tax
That, along with rocky markets and a rise in the Swiss franc
- Liechtenstein's official currency since 1924 -, slashed assets
managed in the country from a 2007 peak of 153 billion Swiss
francs ($214 billion) to 109 billion at the end of 2011.
However, Real said the banks were adjusting well, and saw
little need for the industry consolidation that was widely
expected to follow the clampdown on tax evasion.
"The banks had a very good first half and were able to
attract new funds. That's of course very important. They're also
able to reduce costs," he told journalists.
"I'm optimistic that if there is a consolidation wave it
won't be very strong. The banks are all in good shape with a
strong capital base. I don't see a big consolidation coming."
About a third of Liechtenstein's gross domestic product
(GDP) comes from the banking sector and it also accounts for 16
percent of the country's jobs.
The country's biggest bank, LGT, was ensnared in the German
tax evasion affair, while U.S. authorities are investigating the
second biggest, LLB, for helping rich Americans avoid
Banking has helped to make the 36,000 inhabitants of the 160
square km (62 square miles) principality wedged in the Alps
between Switzerland and Austria among the world's wealthiest,
with national output per head seen at $141,000 in 2012.
Real said banking would remain a cornerstone of the
country's economy, based on its standing as a haven of
stability. He agreed the country's reputation as a haven for tax
dodgers lingered but said it was working hard to change that.
"That is indeed the case and not something you can just
ignore," he said. "But we've taken a new route since 2009 and we
are going down that path with determination. There's no doubts
about that direction whatsoever inside Liechtenstein."
When asked how Liechtenstein could change its image, Real
said: "First of all, we 'walk the talk', as we like to say. We
have proven in the last three years that we're serious about it.
And then it's important that we communicate we're doing that."
(Editing by Mark Potter)