L’The Association of Monegasque Financial Activities (AMAF) lies at the heart of the dynamics of the Principality's economy. The AMAF is essential to the development of the banking industry and oversees all the related institutions and companies.
Interview with Etienne Franzi, President of the AMAF
What are the strong points of the Monaco financial marketplace today?
The strong points, both institutional and human, are numerous. The Monaco financial community is able to take advantage of the stability of the Principality's institutions and it is totally integrated into the Monegasque model, which is based on security for people and property. It is a fact that whenever you mention Monaco abroad, one of the first words to come up is “security”: security for the well-being of all, whether it be that of Monaco nationals themselves, residents of the Principality or for tourists; and it goes without saying that the particular attention given to security is also applied to the banking sector. In this area, our regulatory bodies are of a high standard. Thanks to the many different Franco-Monegasque agreements, all banking activities are supervised by the French Prudential and Resolution Authority (ACPR). Therefore, Monaco banks are subject to the same supervisory rules as their French counterparts. Banks' management activities are monitored by the Commission for the Control of Financial Activities (CCAF), which benefits from the participation of leading members of the Financial Markets Regulator (AMF). In the same way, every financial management company in the Principality must be a member of the AMAF.
Another undeniable strength of the Monaco financial marketplace comes from the stability of the institutions within it. In reality, these establishments are branches of big foreign groups – French, Swiss, British and Italian. There is no strictly Monegasque establishment. In Monaco, the banks are all branches or subsidiaries, run by high-level professionals with much international experience, so the Monegasque financial community is healthy and prosperous. It creates wealth. Its total resources have tripled in 15 years.
What has evolved the most in recent years?
I would like to highlight three major changes. The AMAF now has almost one hundred members, made up of around 40 banks and 60 wealth management companies. What has evolved here is how much the profile of our members has diversified over the space of a decade. During this period, we have seen the number of wealth management company members double from 30 to 60, as a result of the adaptation of the rules which regulate this type of activity.
The second evolution also relates to a second diversification - that of our clientèle, which has been intentional. In fact, we have made a great concerted effort to enlarge it beyond the European Union to the whole of Europe, as well as to the Middle East, Latin America and Africa.
Thirdly, there has been evolution in one of our main objectives, directly linked to our continuous quest for excellence, characteristic of the Monegasque model. I hope to definitively reach a point in Monaco where our collaborators' qualifications are unrivalled compared to those operating in other financial communities. Therefore, I have started to put into place a professional certification, along with the support of Mr Jean Castellini and the full cooperation of the CCAF. We introduced this requirement into our regulations in May 2014 and it is now obligatory. Henceforth, any collaborator on the “front line”, so to speak, in direct contact with our clientèle and marketplace, as well as their superiors, must imperatively be in possession of this certificate.
What is the format of the course for this certificate?
It is a 44-hour training course, taking place at the International University of Monaco (IUM) and has, up to now, been in collaboration with IntellEval Monaco, a centre of skills and expertise in the field of compliance. Sixteen hours are devoted to deontology and the remaining 28 hours are mainly technical training, involving specific financial tools and macro-economics. The course concludes with an exam and the award of a diploma. We ran the first course in 2014 and now, as there are two per year, we are on our seventh intake.
What has been the result of this?
The good fortune to have such an opportunity, which is now unanimously seen as an excellent course, has now become obvious to both employers and employees.
Many agreements of cooperation in the prudential supervision of financial activities in the context of the fight against money laundering have been signed. Is the Monaco financial marketplace now a leading light in this domain?
The Principality is a bit like an echo chamber, since everything that goes on here is widely reported well beyond the borders of Monaco. There can be no oversight. We must, therefore, behave in an exemplary manner. The quality of our regulatory authorities ensures that this is the case in this sector.
The fight against money laundering is another essential element when one is aiming for excellence and is guided by ethical values, which do not permit such deviations. There is a very tight and constant collaboration between the administrative services in the sector and us, the professionals. This goes hand-in-hand with the attractivity of a financial community for demanding clients. Confidentiality and fighting money laundering are compatible. Our banks are expected to have an in-depth knowledge of their clients, their background and the provenance of their capital. At the same time, our banking personnel are bound by professional confidentiality, guaranteeing the privacy of the client. The AMAF has been working on these issues for many years by, for example, publishing professional recommendations which lay out the obligations and duty of care of its members in terms of the identity and knowledge of banking clients, as well as in terms of the surveillance of their money transfers. Of course, professional confidentiality is not enforceable upon the regulatory bodies or those dealing with the fight against money laundering (which are themselves subject to it), or upon judicial authorities acting in the context of a criminal case; and neither can it be applied to setting up exchange of information agreements in the Principality.
As it happens, one of the directives given by HSH Prince Albert II after his accession was that the Monaco banking sector ought to be at the forefront of the struggle against money laundering and the financing of terrorism. This has been something we have been fighting for a long time and now the Principality is regularly evaluated by all the relevant international bodies, whether it be the GAFI (Financial Action Task Force), Moneyval (Council of Europe) or the IMF (International Monetary Fund). In order to achieve our aims, both the manpower and resources of our Financial Intelligence Unit, the SICCFIN, have been considerably strengthened over the past few years.
The Monegasque banking sector aims for excellence in all areas, whether it be in human resources or relating to institutions, in the domains of security, ethics, stability or the quality of services. Because of this – and not wanting to claim model status – I would paraphrase Talleyrand by saying, “by comparison, we are reassured”.
Is the Principality an international financial marketplace?
The figures speak for themselves. Today, half of the sector's resources come from non-resident clients. In the same way, our other collaborators also come from many different countries and walks of life. Monaco is involved with European organisations, with whom the Principality is in constant contact and is also an associated member of the European Banking Federation, which brings together the banking associations of the European Union and the European Free Trade Association; the Principality is also a founding member of the Francophone Banking Union, set up in September 2012, which includes 16 banking associations from different French-speaking countries.
What are the areas most likely to further develop the Monaco financial community's appeal? What challenges lie ahead in the next few years?
We have already initiated the major turning points which, in years to come, will be the highlights of our financial community, which is an important growth area for the Principality. In this way, we continue to strengthen the community's international aspect with intentionally expansive policies. In this sense, some of the infrastructure development projects currently under way will bring real advantages to Monaco, such as that taking place at Nice Airport, which aims to enhance the accessibility of the Principality. At the same time, we will be pursuing and reinforcing another important factor for our financial attractivity and expansion: professional training.
It is also essential to be able to adapt, improve and continuously modernise the rules governing our activities and for this, we work hand-in-hand with our governing bodies.
One of our biggest challenges, however, remains better communication and promotion of the Monegasque financial marketplace, including aspects such as regulation, the dynamics of the economy and reliability. This we are undertaking in conjunction with the Monaco Economic Board, in order to try to dispense of the time-worn clichés which still cling onto us, despite our best efforts.
