What does “automatic exchange of information” mean?

In a joint declaration, numerous states, including all major financial centres and thus also Liechtenstein, committed themselves to the introduction of the OECD standard for transparency and exchange of information in tax matters, the so-called “Automatic Exchange of Information” (AEI). Under the AEI, financial institutions in these countries are required to provide their national tax authorities with information on their foreign clients and their financial accounts.