Our financial centre - everybody's business
In recent months, the Covid-19 pandemic has had far-reaching consequences. It is both a public health disaster and a catastrophic situation for our economy.
However, Luxembourg was able to respond forcefully to this challenge. We provided the resources our health system needed in this unique situation. In addition, we implemented a solid series of measures to support our companies and save our jobs. The Covid-19 crisis will cost us up to 3 billion euros this year.
Such a response to the virus was made possible through the strong economy we have been able to build over many years, driven not only, but to a large extent, by our financial industry.
We have managed to turn this sector into a real industry in Luxembourg, which may sometimes attract criticism from abroad, but often also admiration. It’s true that the reputation of the financial industry worldwide was badly damaged by the 2008 financial crisis, and certainly not without good reason. But let us never forget that the main function of the financial industry is to manage our savings and help us and our companies in financing our ventures. Our banks, investment funds and insurance companies in Luxembourg definitely fulfil this role. During this crisis, banks have helped companies by extending loans. Moreover, after last year’s tornado, insurance companies did not leave people in need and have paid out around €65 million to the victims to date.
However, our financial centre still struggles with critical voices that accuse us of banking secrecy or who were only made aware of Luxembourg due to LuxLeaks. Our financial industry has indeed never consisted solely of our banking secrecy, and LuxLeaks was not directly related to the activities of our banks, insurance companies, and funds.Nor can our success be defined by these activities, as demonstrated by the success we continue to experience in a rapidly shifting environment.
Discover Luxembourg's financial centre
- Since the 1980s, Luxembourg has been a main international centre for private banking
- Luxembourg has significant and unique expertise in serving clients from a multijurisdictional context
- Wealth management is a mixture of portfolio management, succession planning, tax advice and much more
- So far only 1% of the worldwide financial assets are designed to have a positive impact
- The Luxembourg financial centre has been a pioneer in the field of sustainable financing for many years
- 2016 saw the launch of the Luxembourg Green Exchange, which today lists more
than half of the world’s sustainable bonds and is the first exchange ever to focus exclusively on environmentally friendly and sustainable securities
- Luxembourg has created “LuxFLAG”, an agency to verify that “green” financial products deliver on their promise
- The Grand Duchy is the second largest fund domicile in the world after the USA and manages some €5 trillion
- Each year, the Luxembourg fund industry contributes approx. 6% to the GDP
- About half of the government’s tax revenue from the financial sector (€4 billion) stems from the fund industry
- Luxembourg is a world leader in investment funds, representing 58% of the market for cross-border UCITS funds
Digitalisation and Fintech
- Fintech: The digitalisation of our financial services
- Luxembourg is one of the leading e-payment and e-commerce hubs in Europe
- Through Fintech, new types of job profiles related to IT technology are created in the financial sector
Financial connections between China and Luxembourg
- 7 Chinese banks have their European headquarters in the Grand Duchy
- The first Chinese bank to establish itself abroad since the establishment of the People’s Republic was the Bank of China in Luxembourg in 1979
- The largest number of Dim Sum Bonds are traded in Luxembourg
- China is the second largest issuer of green bonds worldwide
- The Luxembourg Stock Exchange works closely with the Shanghai and Shenzhen Stock Exchanges to provide international investors with information on Chinese Green Bonds.
The insurance sector
- With 55 non-life insurance companies, 41 life insurance companies, 196 independent and captive reinsurance companies, Luxembourg is an important insurance and reinsurance centre in Europe
- 4,000 people are employed by the insurance sector in Luxembourg
- Luxembourg is a European hub for life insurance
The capital markets
- Capital markets provide a type of market in which financial instruments are sold instead of produce like fruit and vegetables
- In 1963, the Luxembourg Stock Exchange was the first in the world to list Eurobonds
- There are currently some $25 trillion Eurobonds in circulation worldwide, a large number of which are traded on the Luxembourg Stock Exchange
- Clearstream has €7 trillion in deposits, making the Grand Duchy one of the main European settlement and custody centres
Support services around the financial centre
- Financial institutions need support, e.g.
- Law firms
- Fiduciary companies
- IT platforms
- Human Resources agencies (headhunters)
- In Luxembourg, 7,500 employees work in law firms, consulting and management services
The contribution of our financial centre to the prosperity of Luxembourg
- Each year, the financial centre pays taxes and duties of up to €4 billion to the Luxembourg State
- Our financial centre employs a total of around 51,000 people, which corresponds to 12% of Luxembourg’s active population
- The financial centre contributes 31% to Luxembourg’s economic development, making it the largest single sector of the Luxembourg economy
- Corporate Finance: banking services for companies
- Luxembourg banks offer international companies expertise in several jurisdictions in the corporate finance sector
- In this way, national and international companies will be given the necessary financing to realise their projects and implement their global activities from Luxembourg
- There are 126 banks from 27 different countries in Luxembourg
- They employ around 26,000 people in Luxembourg
- Banks in Luxembourg are strictly regulated and controlled
- Banks in Luxembourg conduct a wide range of activities: fund deposits, private banking, asset management, corporate finance and more
More on Luxembourg's financial centre
Brexit, Ricardo and Smith
Brexit still carries the risk to weaken Europe as a global financial centre, but it equally carries the opportunity to become more than a zero-sum game, by leveraging the complementarity of its financial centres. The EU will need to use the current momentum to consolidate the banking union and create a real EU capital market.
Cautious optimism in Luxembourg's financial sector
Despite considerable global risks, Luxembourg's financial industry is looking to the future with confidence.
The financial sector's role on the path to a sustainable future
The Luxembourg financial sector could play a key role in combating climate change.
Profit will no longer come at the expense of the planet
Finance must return to what it was intended to be, namely the financing of the real economy and the well-being of people, states Julie Becker, the new CEO of the Luxembourg Stock Exchange.
“Even more courageous” in sustainability
Sustainable finance will be the only form of finance of the future says Robert Scharfe, CEO of the Luxembourg Stock Exchange.
GFCI 29: Luxembourg financial centre ranks number 2 in the EU
The Grand Duchy’s position as a leading financial centre has been reconfirmed in the latest Global Financial Centre’s Index (GFCI 29).
Statement by the Luxembourg Government and further information on OpenLux.
Covid-19 impact on the financial sector
According to Nicolas Mackel, CEO of Luxembourg for Finance, the financial centre will also be impacted by the Corona crisis.
The financial sector is European
Nicolas Mackel, CEO at Luxembourg for Finance, discusses the role of the Luxembourg financial centre.
The financial center 2021
A lot has happened this year. The pandemic, Brexit, low interest rates, etc. What can we expect the financial center to look like in 2021?
Government revenue dependent on financial sector
According to Luxembourg's Court of Auditors' draft budget for 2021, the institution warns that public debt will increase "significantly" within the next few years.
Our financial center and the Corona crisis
Covid-19 has affected us all for well over nine months. The restrictions necessary against the spread of Virus will of course have consequences for our businesses, restaurants, hotels as well as organisations in every sector.
The financial industry is once again more skeptical about the future
According to a current survey, majority expects income to be lower in 2020 than forecasted at the beginning of the year.
The fund industry driving the recovery
The Luxembourg fund industry has weathered the initial COVID-19 crisis effects well. For Alfi President Corinne Lamesch, this resilience reflects investor confidence in the economy's ability to rebound quickly.
RTL Radio - Invité vun der Redaktioun
Nicolas Mackel, CEO of Luxembourg for Finance, discusses the impact of Brexit and the Covid crisis on Luxembourg and our financial center with Pit Everling.
Nobody asks about where the wealth came from
Nicolas Mackel, CEO of Luxembourg for Finance, on our financial center.
GFCI 28: Luxembourg financial centre ranked number 1 in the EU
Luxembourg has once again been ranked as a leading European and global financial centre according the latest edition of the Global Financial Centres Index 28.
Nicolas Mackel, CEO Luxembourg for Finance, at RTL
In an interview with Fränk Goetz, RTL Journal, Nicolas Mackel discusses the strengths, its role and the future of the Luxembourg financial center.