What is Banking Secrecy definition/concept

Banking entities have the power not to disclose all information about their customers to public administrations. Thus, bank secrecy is the protection of banks or financial institutions in relation to the information they have about their customers, otherwise this information would be exposed to misuse by third parties. In other words, bank secrecy should be understood as a variant of professional secrecy, as it means the non-disclosure of information to third parties. Banking Secrecy

If under any circumstances a bank employee discloses financial information about any customer, he or she will be committing an offense and must assume responsibility for this negligent act. It should be noted that a bank customer has rights, including the right to privacy, image and honor.

Bank secrecy exceptions

Although laws oblige banking institutions to respect bank secrecy, there are some exceptions. For example, when tax institutions explicitly need information from a taxpayer or when there is a mandatory court order which is intended to carry out a criminal investigation . Banking Secrecy

The laws protect privacy and bank secrecy has a drawback: it makes fiscal control difficult and, therefore, it is a barrier that allows the evasion of capital and the corresponding fraud to the public treasury Banking Secrecy

Because of this, some analysts propose the abolition of bank secrecy as it currently exists.

A variant of this same idea consists not only in the total abolition of bank secrecy, but also in the possibility of having access to bank account information in order to establish a more effective fiscal control by the administration. Obviously, those who defend the legitimacy of bank secrecy claim that access to financial information amounts to violating the laws that protect bank secrecy.

The “Papers of Panama” and the weakness of bank secrecy

The debate on bank secrecy has a global character and proof of this is the “Papers of Panama” scandal that emerged in March 2016. The disclosure of data on financial activities affecting individuals and companies put the complexity of bank secrecy on the table and its fragility, as currently there are technological means and computer specialists (the famous hackers) that can weaken and question the protection of bank secrecy. Banking Secrecy

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