Monaco defends banks ahead of Merkel meeting

BERLIN, (Reuters) – Monaco’s Prince Albert II defended the principality’s banking sector on Wednesday ahead of talks with German Chancellor Angela Merkel that take place amid pressure for tax havens to crack down on financial crime.

Germany launched a tax-dodging probe earlier this month that has centred on Liechtenstein, which like Monaco and Andorra is on the Organisation for Economic Cooperation and Development’s (OECD) tax-haven black-list.

Albert told Germany’s Frankfurt Allgemeine Zeitung newspaper that Monaco had improved its banking transparency and aimed to reach the highest international banking standards.

“Our steps forward have been considerable, but it’s not enough to be blameless. I want Monaco’s financial centre to diversify,” he said, adding that he wanted the principality to focus less on managing assets and to offer financial products.

“Our financial centre must reach the highest standards. The principality has strived for many years for our banking centre to conform to international regulations.”

Berlin has said Merkel’s meeting with Albert is to discuss international trade and cooperation.

German prosecutors said on Tuesday they had widened their tax probe to a second bank in Liechtenstein.

The trusts they were probing held far more than 200 million euros ($300.8 million) and “immense” sums of tax revenue had been dodged, the prosecutors said.

Other countries including Britain and the Netherlands have joined Germany to hunt down tax cheats with money stashed in Liechtenstein. Germany has said the probe could spread to other countries.