EU finance ministers must embrace bank transparency

Issued by Transparency International Liaison Office to the European Union



Transparency International EU calls on finance ministers to publicly state their support for greater bank transparency ahead of tomorrow’s crucial meeting that will finalise sweeping financial sector reforms.

Following last week’s breakthrough in negotiations between representatives of the European Parliament and national governments, EU-based banks will be required to publicly disclose information on profits, taxes paid, revenues, public subsidies and staff numbers on a country-by-country basis. Such reporting will provide a clearer picture of banks’ financial contribution to the countries where they operate and their use of low-tax jurisdictions. The deal needs to be formally endorsed by finance ministers before becoming law.

The proposals are a new addition to the EU legislation that will implement global banking reforms agreed by the G20 in 2009. It will be the first time that financial institutions are required to publicly disclose detailed financial information of this nature.

“The EU has an historic opportunity to lead the way on bank transparency”, said Jana Mittermaier, Director of the TI EU Office. “EU citizens know more than most the consequences of an opaque and unaccountable banking sector, where cross-border financial flows are shrouded in secrecy. This legislation will be a major step in making banks more answerable to the concerns of citizens and investors alike, particularly at a time when all are being asked to shoulder the burden of austerity. Finance ministers should be clear about their commitment to this standard of transparency and publicly voice their support”.

Research by Transparency International has shown the poor track-record of country-level disclosures in the financial sector. An assessment published last year of 24 of the largest financial firms globally showed that on average they scored 2.3% for country-by-country reporting (where 100% means full transparency). EU-based banks such as Lloyds and BNP Paribas scored 0%. Barclays - which reportedly has 390 subsidiaries located in tax havens - scored 0.8%. The results for all 24 firms can be seen here.

The proposed disclosure regime will come into effect in 2015 subject to a European Commission review that will assess the impact on the competitiveness of EU banks. Similar rules for the oil, gas, mining and logging sectors are currently under negotiation, with a final decision expected in the coming months. The US finalised its version of the rules for the extractive sector in August 2012, but an extension of country-by-country reporting requirements to other business sectors is not envisaged.

Editors note:

The Economic and Financial Affairs Council (ECOFIN) composed of Member State finance ministers will meet on Tuesday 5 March to agree the EU version of reforms to the global banking system agreed by G20 heads of state in 2009. The so-called “Basel III” rules impose minimum capital and liquidity standards on banks. The EU version of the rules also includes additional disclosure requirements and caps on remuneration not agreed at the global level.

--- end ---

Transparency International is the global civil society organisation leading the fight against corruption.


For any press enquiries please contact

Jana Mittermaier
Director Transparency International Liaison Office to the EU
E: .(JavaScript must be enabled to view this email address)

Carl Dolan
Senior EU Policy Officer, Transparency International Liaison Office to the EU
T: +32 2 23 58 603
GSM: +32 (0)488 563 435
E: .(JavaScript must be enabled to view this email address)

Latest

Support Transparency International

Apply Now for Transparency International School on Integrity!

Apply today for the Transparency School 2018 and spend an insightful week with anti-corruption enthusiasts from all over the world!

Blog: Making Summits Meaningful: A How to Guide for Heads of Government

Heads of Government spend a lot of time in glitzy international summits. World leaders shouldn't fly around the world just for a photo op or to announce new commitments they have no intention of keeping. Here's is a how-to guide for Heads of Government to make summits meaningful.

While the G20 drags its feet, the corrupt continue to benefit from anonymous company ownership

The corrupt don’t like paper trails, they like secrecy. What better way to hide corrupt activity than with a secret company or trust as a front? You can anonymously open bank accounts, make transfers and launder dirty money. If the company is not registered in your name, it can't always be traced back to you.

Urging leaders to act against corruption in the Americas

The hot topic at the 2018 Summit of the Americas is how governments can combat corruption at the highest levels across North and South America.

The impact of land corruption on women: insights from Africa

As part of International Women’s Day, Transparency International is launching the Women, Land and Corruption resource book. This is a collection of unique articles and research findings that describe and analyse the prevalence of land corruption in Africa – and its disproportionate effect on women – presented together with innovative responses from organisations across the continent.

Passport dealers of Europe: navigating the Golden Visa market

Coast or mountains? Real estate or business investment? Want your money back in five years? If you're rich, there are an array of options for European ‘Golden Visas’ at your fingertips, each granting EU residence or citizenship rights.

How the G20 can make state-owned enterprises champions of integrity

For the first time in its presidency of the G20, Argentina is hosting country representatives from across the globe to address the best ways of curtailing corruption and promoting integrity in state-owned enterprises (SOEs).

Europe and Central Asia: More civil engagement needed (Part II)

As follow-up to the regional analysis of Eastern Europe and Central Asia, additional examples from Albania, Kosovo and Georgia highlight the need for more progress in anti-corruption efforts in these countries and across the region.

Lutte contre la corruption en Afrique: Du bon et du moins bon

La publication de la dernière édition de l’Indice de perception de la corruption (IPC) offre un bon point de repère pour situer les efforts de lutte contre la corruption que l’Union africaine (UA) poursuivra tout au long de 2018

Social Media

Follow us on Social Media

Would you like to know more?

Sign up to stay informed about corruption news and our work around the world