April 13, 2013 / 12:11 PM / 7 years ago

Senior Austrian bank exec defends banking secrecy

VIENNA, April 13 (Reuters) - Austrian banking secrecy is a legitimate tool to defend people’s privacy and is not being abused routinely to hide illicit funds, one of the country’s most senior bankers said in the face of mounting international pressure to end the practice.

“I still believe many people have a basic interest in saying ‘I simply do not want the taxman to find out without my knowledge where I have an account’,” Walter Rothensteiner, who represents banks in Austria’s powerful chamber of commerce, told broadcaster ORF in an interview aired on Saturday.

“Just because I have nothing to hide doesn’t mean I have to make it public.”

Banks follow strict rules on identifying customers and report suspicious transactions so that “shady figures” cannot simply deposit suitcases full of cash, said Rothensteiner, who is also chief executive of Raiffeisen Zentralbank and chairman of its Raiffeisen Bank International unit.

The European Union’s six biggest countries agreed on Friday to cooperate in fighting tax havens, piling pressure on Austria to follow Luxembourg in ending bank secrecy.

Its partners want Vienna to sign up to EU rules for the automatic exchange of information on bank depositors. It follows Luxembourg’s decision this week to share cross-border bank account details with EU governments from 2015.

While Social Democrat Chancellor Werner Faymann has expressed willingness to negotiate, conservative Finance Minister Maria Fekter has dismissed exchanges of information as an invasion of privacy and chided other countries for failing to tackle what she called the real “hot spots” of money laundering.

She favours the current system in which Austrian banks withhold tax on EU citizens’ interest income and return the money anonymously to home countries.

Rothensteiner said Fekter “had good reasons to fight for this issue” but Austrian banks were not pushing her to take a hard line. He said he did not fear a major outflow of funds should Austria agree to share more information.

He insisted Austria was not a haven for dirty money and did not actively seek to lure dubious deposits by trumpeting its bank secrecy, which is anchored in the constitution.

While he could not rule out the presence of some illicit funds, he dismissed as exaggerated estimates that it could amount to 10 billion euros. Foreigners have 53 billion euros in Austrian banks and EU citizens 35 billion, a tenth of the total.

“The primary issue is really whether we report every account that an Austrian or a foreigner - I don’t think you can uphold the differentiation - has here automatically to the authorities or not,” he said. (Reporting by Michael Shields; editing by Ron Askew)

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