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Watchdog tells "opaque" finance sector to open up

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  • * Multinationals have improved transparency but much more still to do * Financial sector lags in providing information on operations * The 105 companies surveyed are worth a total of $11 trillion By Gareth Jones BERLIN, July 10 (Reuters) - Big banks...
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Tue Jul 10, 2012 8:30am IST

* Multinationals have improved transparency but much more still to do

* Financial sector lags in providing information on operations

* The 105 companies surveyed are worth a total of $11 trillion

By Gareth Jones

BERLIN, July 10 (Reuters) - Big banks and insurers, which played a central role in the global financial crisis, need to be more open about their operations, a Berlin-based corruption watchdog said on Tuesday.

In a report covering 105 global firms, Transparency International (TI) singled out banks and insurers for special criticism, saying opaque structures in their sector persisted.

The 24 financial companies included in the report scored an average of 4.2, a relatively poor figure, TI said. It awards companies a score out of 10, where 0 is least transparent.

"The study found that reporting by banks and insurers on transparency measures underperformed across the board even though opaque company structures played a contributing role in the recent financial crises," TI said in a statement.

TI's report coincides with a new wave of international public anger over banking practices after Britain's Barclays was fined more than $450 million for manipulating interbank lending rates and its chief executive Bob Diamond was forced to resign.

Authorities in the United States, Europe, Japan and Canada are now examining more than a dozen big banks over suspected rigging of the London Interbank Offered Rate (Libor).

"Multinational financial businesses, those that are 'too big to fail', play a critical role in ensuring the soundness of and confidence in the global economy," the TI report said.

"If and when financial institutions fail to self-regulate, governmental regulators need to step in. And where voluntary or imposed regulation fails, investors and civil society must raise their voices and demand greater transparency."

Companies that scored highly on TI's transparency scale included Norway's Statoil, which ranked as the most transparent company surveyed, scoring 8.3.

Other companies that did well included mining giants Rio Tinto and BHP Billiton and German chemicals maker BASF.

Among the worst performers were Russia's gas export monopoly Gazprom, Japan's Honda and several Chinese banks.

DESTRUCTIVE FORCE

The report urged all large international companies to make greater efforts to tackle corruption.

"The multinational companies remain an important part of the problem of corruption around the world," said TI's managing director Cobus de Swardt.

"The time has come for them to co-lead the solutions. For this they need to dramatically improve."

Firms should disclose more information on how they try to reduce corruption and also make public how they are organised and ho

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