Banks are the most widely used institutions in the banking industry all obverse the world. They offer both services to local people and to the public in these international needs. For a long time, banks have been of great benefit in the transfers of monetary matters especially when payments are being made. As banking involves both local and international services, banks do collaborates with each other to eases the services offers to the clients. The banking services are offered to individuals who enter in to concentrates with each other. In the initial opening of these transactions between the clients of banks and the banks, certain information is disclosed by the clients to the bank managements. This information concerns personal details including both details on personal identifications as well as financial status. Such kinds of information need to be kept secret by the banks. The banks do agree to maintain security for the information to safe gourds the clients from adverse conditions both from public relatives and the legal government matters. Thus, the bank secrecy has legal biding under which the banks are allowed to protect theses personal information However, due to certain circumstances which touch the client issues, different countries have established laws which may demand for disclosures of such information. (Choudhury, 2002)
The banking secrecy laws vary from one state to another. In countries likes Switzerland which forms one of the most significance centre in the international baking in the world has developed a strong tradition on financials privacy. Both the constitutions and the banking laws provide some kind of solid legal foundations for the establishment of strict standards of confidentiality. As their laws provisions are bounding, the country traditions and cultures is that in banking, the banks do not have the authority to disclosed information not unless their information are demanded through the judicial channels. The conditions of confidentiality apply to individuals in the local country and even to those residing in foreign countries.
On the observations of the secrecy in the banking sector, this is held with higher esteems to an extent that any employees in the sectors are holds guilty by acknowledging the existences of individual accounts. As far as banking secrecy is concerned within the boundaries of Switzerland, the constitutional laws are said to have protection of banking information even in some matters which require legal action. Hence, the Swiss does not allow the disclosure of information to authorities on foreign taxation issues as well as the international revenues services. The stand on such means that the country do not recognizes tax evasion by various individual and groups as criminal offences for it to disclose information. Further, the country sometime company to matters on criminal offences which are accepted through procedural considerations by the authorities. These procedures include the proof from the government which requires the information, to show the criminal offenders which have been committed by the clients. New proofs have been furnishes, the banking sector can only release records information which are relevant and coherent to the specified transactions. (Ali, 2004)
In the Bahamas, there are also several laws which are put in places as to guide on banking secrecy. The laws do protects the client’s information from its disclosure by the banks to publics and foreign world. Bahamas and Liechtenstein are all having similar laws in which clients are well protected from risks in taxation issues. The banking secrecy in both territories the issues of banking secrecy is becoming a hot debate. Some of the people are supporting this banning of the banking secrecy whiles others are forming firm claim on the opponent sides. The Liechtenstein comprises the strongest banks with the highest degrees of confidentiality, hence many international bodies are said to claim and argues it to reduce its status of confidentiality protections inn orders to fight the corruption vices which have becomes rampant per the current situation. However weakening of this is not being a major issues being considered. In the Luxembourg, the banking systems are under the control of the laws. The obligations of the banks to give the information are governed by the courts and the civil laws. Banking secrecy in the country prohibits any elite in the bank sectors from unveiling information of their customers to third parties. Similarly to many other countries, in Luxembourg, the right to secrecy is not enforceable against a clients or even a client’s heir.
Although there are the obligations of professional secrecy, the banker has mandatory demands to know well more about its clients. During certain circumstances, Luxembourg management digs further to information sources which disclose details on future beneficial heirs. This prevents the chances or the probabilities of certain people getting the advantages on opening anonymous accounts. The anonymous accounts ownerships form the most challenges s matters on banking. This is because there are threatening chances of banking systems which have been discovered on the international banking. The Luxembourg therefore bears grant watch on such fraud banking. The Luxembourg banking secrecy does not protect potential criminal. In the case of criminal event, banki8ng secrecy is bound to be lifted through the orders of judges acting on the basis of international cases. This shows that these Luxembourg has great consideration on matters which are attached to the current banking services. The Luxembourg therefore extends it cooperation to other organization within the state as well as international organizations on other countries in the prevention of criminal event such as many laundering. (Khan, 2005)
Banking in the international global has been very of competition fields. Due to this, the managements of banking system have adopted different ways of attracting clients to invest in their international banks. With this kind of competitions in the unite states, bank secrecy has taken centre of interest in attracting people from the international markets. Banking secrecy laws are therefore core to the attraction of investors to a particulars bank. The maintenances of banking secrecy are ones ways which makes many banks gains more customers than others. If the change does not favors and augment the degrees of privacy and personnel protection on financial and property matters there are high chances of having low numbers of investors. This not brings yields to the low number of investors but it also makes the already existing clients to withdraw from such firms. The banking secrecy law in the United States is significant in this prosperity of banking services. This area achieved through several way and methods. The banking secrecy laws have the requirements these banking organization should have a frames works which does observes the personal privacy. However, the privacy like in Switzerland and Luxembourg, there some codes which do not obligates total privacy to the clients. This is especially when issues of offensives matters arises. As per bank secrecy acts the strengthening of the United States banking secrecy laws make them to have more important. (Ariff, l982)
The banking secrecy law in the united state has wide implication to the people in the united state. The fact that the act of secrecy prevents the disclosure of this private information will enable many people from other part of the world to invest in the states. This will allow and gives more advantage on the retention of financial standards which are high in the world systems. The strengthening of the banking secrecy in which the banking organizations are require to know more about the c costumers will also helps in the maintenance of confidentiality after the person passes away. This is achieved by the disclosure of the heir of such monetary investment. The acts also haves much impact when it come to the regulation of fraud Activities which may take place in the banking sector.
Considering the escalating condition of technologies which are offering high and speedy monetary transfers, imposing the laws which require the customers to disclosure certain information will aid in controlling vices associated with banking service. This is especially in the fields such as money laundering, which many people from the developing countries have fallen as victims. This banking secrecy acts will therefore be a step on anti – laundering from the international banking clients. This act thus has major role to play with the both the advantages on the state monetary control measures. This is improved through having banking systems with the internal controls to make sure that there is compliance to, the banking secrecy acts. Further the banks do have the obligation of training the appropriate personnel which is responsible for coordinating ands monitoring the banking secrecy act. (Mueller, 1990)
Reference
Ali, M. (2004): Banks and Strategies of Economic Cooperation: New Century Publishers.
Mueller, K. (1990): International and Comparative Law: vol.18 pp 361–362.
Bhatnagar, B. (1998): Participatory Development and the World Bank.
Abdullah, A. (2000): Journal of Banking and Finance, vol. 4 pp. 31-56.
Baden, A. and Shook, D. (1999): The Financial System: Wiley and Sons Inc.
Khan, M. (2005): banking as practiced now in the world: Harvard university press.
Ariff, M. (l982): Monetary policy in an interest-free economy.
Choudhury, P. (2002): Toward a Just Monetary System: oxford press.