Good afternoon.

The financial crisis has initiated discussions and work by regulators, both at the national and the international level, aiming to strengthen the financial legal framework. There are indications that the European Union will form new rules with this same aim, including in the area of supervision of financial undertakings, disclosure and bank confidentiality. These rules are bound to affect our national legal framework in this respect.

Even though not defined in Icelandic law, daily discussions on the term “bank confidentiality” appear to be wider than indicated by law. The multifaceted term is and has through the years been rather controversial, mainly due to the many aspects involved. Therefore, when reforming rules on bank confidentiality, these aspects need to be well kept in mind.

On the one hand it must be secured that the rules will neither enable individuals nor companies to hide unsound and possibly even unlawful business practice. On the other hand it needs to be remembered that majority of the general public are lawfully abiding citizens that have nothing to hide. For this latter mentioned group it is important that they can rely on proper confidentiality with respect to their financial matters.

Changes aiming towards securing these goals are well obtainable. Firstly, bank confidentiality may not restrict access to information of those that have a supervisory role to play. Despite the fact that the Financial Supervisory Authority (the FSA) already has extensive authority to gather information from financial undertakings, further improvements could be made. This could for example be done by looking to Danish law, where the law stipulates that the right of others, having a supervisory role to play, to obtain information prevails FSA’s bank confidentiality.

Secondly, public documents on financial undertakings, for example annual reports and other reports, including notices both from the undertakings themselves and the relevant supervisory authority need to reflect their position as accurately as possible.

Lastly, it is important to secure bank confidentiality in certain instances. Imposing an obligation on financial undertakings to reveal information to those clients that so request about who have, by the use of their computer systems, examined information relating to their financial interests could be an option. By law the health system currently allows for such right of patients; by request they have the right to know who have accessed information that relate to them personally.

When rebuilding our new financial system it is important that no shelter is being offered for those that have things to hide from supervisory authorities, whether it being the FSA, taxing authorities, competition authorities, police, prosecutors or others. At the same time there are those that need to be able to trust that bank confidentiality is honoured. Soundness and transparency are of key importance.

It is important to have healthy and open discussions about the financial system, including discussions on what has gone wrong in the past and in what areas improvements can be made. By referring to bank confidentiality the collapsed banks of the past, their owners and directors should not hinder these healthy and open discussions. As I mentioned earlier, due to the financial crisis, work is already underway, both at the national and the international level, aiming to strengthen the financial legal framework. This includes work at the Ministry of Business Affairs which is expected to lead to changes of the Act on Financial Undertakings, including rules relating to bank secrecy.

The most recent events, where an acting prosecutor has dismissed charges made by the Financial Supervisory Authority against some journalists for publishing information believed by the FSA to breach bank confidentiality, confirm the need to reconsider the legal framework involving bank confidentiality. This change needs however to be carried out cautiously and it is my personal opinion that bank confidentiality should not be extended to the media.

With these words and as I look forward to listen to our distinguished speakers I welcome you all to this conference on bank confidentiality

Ráðstefna um bankaleynd