Monaco bets on the 'private banking'

With 260 billion francs of deposits, 320.000 bank accounts, 70 banks, the Principality has become a real financial plat-form.

The figures make you dream. The Monaco State-city, 30.000 inhabitants over 200 hectares, generates 260 billion francs in its safes. This is the amount of deposits in the Monegasque banks, the figure of December 31st 1998. Other very outstanding ratios : the Principality counts 320.000 bank accounts, ten times more than inhabitants; with 70 financial institutions and one branch of bank for 400 inhabitants, it is one the place with most banks in the world. Moreover, with 1.700 professionals, the single bank activity accounts for more than 5% of the labour force of a country which offers more jobs than the number of the population !An annual growth of almost 20% !Of course, the bank activity is not a new one on the 'rock'. For already 20 years, thanks to a sweet fiscal system, the bank have had the wind in their sails. But the great rise occurred five years ago. When, after the crisis generated by the Gulf war, a choice was made to develop what Anglo-Saxon people call 'private-banking'. The management of upper-class patrimony. This was a boost. Thus, over the last five years, the annual growth of deposits has soared up to 18%. The fiscal system, but also the developed savoir-faire and sophisticated bank technologies that have been created, have attracted rich foreign customers. Thus, as time went by, the French franc has been supplanted by foreign currencies which account for 60% deposits. The other side of the coin, Monegasque banks which are as international as their customers (French and Italian banks have been caught up by American, British, Dutch, Spanish banks) only think about this top range activity which is particularly gainful. And they neglect the service to companies and shops. Another characteristic of the Monegasque economy that could suffer because of this unashamed health of banks…