echo-interview with Roland Matt, Group CEO of the Liechtensteinische Landesbank (LLB)
elipsLife echo: Mr Matt, the banks in Liechtenstein seem to have done a better job of shaking off the suspicion of aiding and abetting tax evasion than their counterparts in Switzerland. Has Liechtenstein been smarter than Switzerland in this regard?
Roland Matt: I can only speak for Liechtenstein of course. But our country restructured its financial marketplace both in a very rigorous fashion and at an earlier stage than others did. In a policy statement of 14 November, 2013, the government affirmed its declaration made in 2009 to continue pursuing a tax conformity strategy. So it was no coincidence that Liechtenstein was one of the 52 countries that signed up to the 2014 agreement to automatically exchange financial data. As a result, our country is one of the so-called early adaptors, states that will actually begin implementing the information sharing as early as 2017, one year earlier than Switzerland.
and in regard to the relationship with the U.S.?
In this context, our measures are very similar to those taken by Switzerland. Regarding FACTA, the Foreign Account Tax Compliance Act enabling the U.S. to tax all accounts held abroad by individuals with tax liability in the United States, the solutions implemented by Switzerland and Liechtenstein are equally similar as are those dealing with legacy issues.
Did the Swiss National Bank's decision to remove the cap on the value of the Franc against the Euro and its introduction of negative interest rates impact the LLB to the same extent as it did the Swiss banks?
In principle, yes. The Swiss National Bank's decision had a general impact on the interest rate level which also influenced our business result. One case in point was the valuation of interest-rate swaps, the instruments used to hedge against a bank's interest-rate risks. A lower interest-rate level affected this valuation. Another example were clients' assets, some of which are denominated in foreign currencies. In the case of the LLB Group, approximately 50% of clients' assets are in foreign currencies. Should these assets decline in value as a result of lower exchange rates, then the earnings they are able to generate will shrink as well. That said, I should point out that the National Bank's decision has not impacted either our equity capital or our liquidity position. In addition, the LLB is currently not affected by negative interest rates on current accounts, since it remains within the SNB's exemption limit.