Raymond Frenken

As inflation persists across Europe, with double-digit numbers for some eurozone countries, ECB President Christine Lagarde’s road map for upcoming interest rates hikes drew a mixed response in the markets.

The European Central Bank on Thursday, in no hurry to raise interest rates while inflation pressures continue to build, took another small step on its journey  towards higher eurozone benchmark rate as Lagarde repeatedly underlined the need for flexibility in the bank’s monetary policy.

Frankfurt-based Universal Investment Group, a leading asset services provider with Super ManCo status in Luxembourg, on Tuesday flagged further European growth ambitions outside German-language countries when it announced it had reached agreement on its acquisition of European Fund Administration for an undisclosed amount.

While the Federal Reserve is expected to raise rates aggressively in the coming months, the European Central Bank, fearing the impact on Europe’s weaker economies, will remain reluctant to quickly boost Eurozone interest rates to mitigate the effects of rising prices. The ECB is due to provide a new monetary policy update on Thursday at its next six-week press conference.

Revenue from corporate banking activities in Luxembourg has risen nearly 60 percent since 2016 to approximately 3 billion euro, according to a new study conducted by consultancy firm PWC. The consultants also found a need for the government and regulators to join the banking sector on its innovation journey in order to address regulation challenges. 

Those who see what’s happening in today’s post-Brexit financial world will undoubtedly recognise that Luxembourg is serious about its role as Europe’s back office. 

Luxembourg’s fund industry continues to transform and reinvent itself. Wedged in between Germany, France and Belgium, the country has clearly carved out a position in Europe’s financial services market as a platform where the multijurisdictional and multilingual expertise of its businesses, and the thousands of internationals who work here, can flourish.

Luxembourg’s financial supervisor, releasing its eagerly anticipated guidance for investment funds exposed to Russia, has outlined a range of segregation options to handle stranded assets in Russia. Funds also were reminded to assess if they are potentially in breach of sanctions against Russia and Belarus. 

New options for trading securitised debt products are available in Luxembourg after its parliament approved long-awaited amendments to its securitisation law. In an interview with Investment Officer, Harneys’ counsel and securitisation lawyer Massimiliano della Zonca sees it as a game changer for the Grand Duchy. 

Tech advisory and investment firm GP Bullhound on Monday said it is opening an Luxembourg office after the national supervisor gave a green light to application for a licence as Alternative Investment Fund Manager, or AIFM. In parallel to the Luxembourg launch, the company is opening a new office in Zurich.

Fierce competition has emerged in the changing data landscape for investment funds, and Luxembourg is the finding itself at the centre of attention. The Frankfurt and Luxembourg stock exchanges now confront each other face to face in the grand duchy, while the Paris bourse has thrown its towel into the ring and is back on the sidelines. 

Fund data specialist FE fundinfo, partly owned by the Luxembourg Stock Exchange, said it has reached an agreement with Euronext to acquire French fund data provider Funds360 for an undisclosed amount. The deal expands its geographical presence in Europe and Asia.