Austrians' love of bank secrecy has deep roots

Fri Apr 12, 2013 6:12am EDT
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By Michael Shields

VIENNA (Reuters) - Call it the battle for grandma's passbook.

That is how politicians here are framing a debate over whether Austria should roll back banking secrecy and share information on depositors with European partners and the United States. Luxembourg's decision this week to open its books has fixed attention on Austria, the last EU holdout.

The discussion has touched a nerve in a country where the confidentiality banks offer is so cherished that banking secrecy is anchored in the constitution. Why Austrians are so wedded to such secrecy is answered in part by a distrust of authority. The country's Catholic identity and a nod-and-wink approach to off-the-books work in the shadow economy may play a role too.

"I and certainly many other customers require two things above all from banks: reliability and discretion," reader Florian Stadler wrote to Krone, Austria's most-read tabloid. "It is no one else's business how much money I save or spend or with whom I do business."

Officials insist they will defend Austrian citizens' privacy from the taxman and discuss revealing details only of foreigners with accounts in Austria.

Unlike in Luxembourg and Cyprus, brought to the brink of bankruptcy by its overblown banking sector, foreign deposits play a relatively modest role in Austria.

Central bank data show other EU citizens have around 35 billion euros ($45.9 billion) in banks here, a tenth of overall deposits. In all foreigners have 53 billion in local banks.

Finance authorities can already get access to accounts if they have well-founded suspicions of wrongdoing.   Continued...

A woman takes a deposit box out of a compartment in the safe room of an Austrian bank in Vienna April 10, 2013. REUTERS/Heinz-Peter Bader