By Marc Jones
LONDON, April 9 Luxembourg is considering ending
its bank secrecy rules by automatically handing over details of
bank account holders to other European Union states, its finance
minister said on Tuesday.
The European Commission wants all 27 EU member states to
strengthen rules on how income on savings held in bank accounts
is taxed, including an automatic exchange of information about
which account holders receive what interest payments.
Nearly all EU members already have such an exchange under
rules known as the EU Savings Directive, but Luxembourg and
Austria have so far resisted revealing their details to other
countries and instead get banks to withhold tax.
At the weekend, Finance Minister Luc Frieden said Luxembourg
was open to more transparency in its financial industry.
Asked at a banking conference on Tuesday organised by ALFI
whether Luxembourg would sign up to the automatic data exchange,
he said the country's authorities were considering it.
"It has not been decided, it is something that is being
discussed in the government," Frieden told Reuters.
Austrian Chancellor Werner Faymann said on Tuesday his
country would join Luxembourg for talks with the European Union
on how to crack down on cross-border tax cheats, signalling an
easing of Vienna's earlier hardline stance on bank secrecy.
Speaking to reporters earlier, he said the country's banks
had not been impacted by Cyprus's move to impose levies on
deposits and savings as part of its EU/IMF bailout deal.
Asked whether there had been an outflow of deposits since
the deal, which will see Cypriot bank account holders lose a
large chunk of deposits above 100,000 euros, Frieden replied:
"Not at all. To the contrary, we see a lot of people around the
world have trust in the Luxembourg financial sector, especially
people in Asia."
In his earlier speech, Frieden sought to distance
Luxembourg, which like Cyprus has a hugely oversized financial
sector compared to the size of its economy, from the problems
suffered by the Mediterranean island.
The decision to tax deposits over 100,000 euros in Cyprus
has added a new dimension to the euro zone's crisis and has
raised fears that rapid bank runs could occur if problems emerge
"Luxembourg is strong and quite different to a country such
as Cyprus," Frieden said, citing the largely international
ownership of banks and investment fund firms operating there.