Supervision

Now that the initial dust on SVB’s collapse has settled, one of Europe’s top bank supervisors has a clear message for investors, bankers and financial market participants: banks in Luxembourg and elsewhere in Europe are safe and sound thanks to stringent supervision. “If rates were to still increase, our banks would not sustain losses up to a level that would put their solvency into question,” said Claude Wampach, who serves as director of banking supervision at Luxembourg’s financial regulator CSSF, speaking to Investment Officer.

Answering questions about the bank run on Silicon Valley Bank, the European Central Bank on Sunday underlined its concerns over how European banks are managing risks relating to increasing interest rates. The ECB reiterated that a recent supervisory review found weaknesses at banks, including ignoring consumer behaviour shifts that could lead to deposit withdrawals when rates rise. “Beyond a certain point, it could become an issue,” ECB chief bank supervisor Andrea Enria said in a Latvian interview last week.

Luxembourg’s financial regulator the CSSF announced last Friday afternoon that it had fined trust and corporate services provider Intertrust (Luxembourg) S.à r.l. nearly 200,000 euros at the end of last November for several failings. This included meeting professional obligations for IT risks as well as internal governance, the professional secrecy obligation and for required communication to the regulator. 

Financial supervisor CSSF has issued a fine of 1.56 million euros to the Luxembourg unit of Belgian bank Degroof Petercam after it found the firm to be in “non-compliance with its professional obligations” in regards to anti-money laundering measures.

The announcement that some 500 Microsoft Exchange servers “need immediate attention”, issued by Luxembourg’s cybersecurity agencies last week, has been echoed by financial regulator the CSSF. A noted international cybersecurity expert linked this to the difficulty in finding top cybersecurity talents in Luxembourg. “The struggle that people in Luxembourg have, certainly clients that we’re talking to, that want to work with us, but don’t yet, is that they can’t find the skill sets,” said George Ralph (photo) of Richard Fleishmann and Associates.

Luxembourg’s financial supervisor CSSF on Friday brought attention to a warning from the grand duchy’s cyber security authorities which said an “alarming situation” has been created because more than 500 computer servers have not yet been updated with a critical software patch for Microsoft Exchange servers.

The European Securities and Markets Authority, the EU’s financial markets regulator and supervisor known as Esma, on Thursday warned investors that they should prepare for further market corrections, given a “confluence of high risks”. 

Luxembourg’s financial supervisor CSSF this week announced that it, at the end of 2021, presented management company Alter Domus with a fine of 174,000 euro relating to the collapsed Columna Commodities fund. 

This Luxembourg fund, created in 2013, went into liquidation in 2017, a year before the sale of its manager, Luxembourg Fund Partners, or LFP, to Alter Domus. CSSF said the fine was issued on 1 December 2021, more than a year ago.

Luxembourg alternative investment fund manager FundRock, part of the Apex Group, has been given a fine of 45,800 euro by Luxembourg’s financial regulator CSSF because the firm did not properly apply the rules relating to benchmarks.

Luxembourg’s financial supervisor CSSF has said it will start collecting information from firms on their anti money laundering and terrorism financing setups from next Wednesday, 15 February, through its annual industry-wide survey.