Raymond Frenken

European Central Bank President Christine Lagarde on Thursday declined to rule out a hike in interest rates this year as costs of living in the eurozone are rising faster than expected. Lagarde said the March and June meetings of the ECB’s governing council will assess an updated analysis that takes into view the larger than expected inflation increases reported during recent weeks. 

The EU braces for a legal battle over plans to label nuclear energy and gas as sustainable transition fuels. Luxembourg and Austria are preparing steps to have the proposed delegated act annulled.

FundRock, a unit of Apex Group, said on Tuesday that it will serve as in-house manager of the Premium Maritime Credit Fund, a new Luxembourg-based fund that first closed in January after raising 110 million dollars from European institutions and family offices.

Universal-Investment, the third-largest management company in Luxembourg, said on Tuesday that it has been appointed as the management company for the Luxembourg fund portfolio of Switzerland’s Fisch Asset Management. Increasing costs and regulatory requirements are mentioned as reasons for the transfer.

Nicolas Mackel, CEO of Luxembourg For Finance, speaks to us about Luxembourg’s role as a home for global funds, Brexit, EU cooperation, global competition, and the challenge to attract talent.

The Grand Duchy of Luxembourg was home to a record EUR5.86 trillion in global financial assets at the end of last year, according to new data released on Friday by the country’s financial supervisor CSSF. That is up 17.8 percent from the end of the previous year.

An alternative investment vehicle that relatively swiftly established itself in Luxembourg continued to become more popular last year, an analysis of data filed with the country’s business register shows. If growth continues at the current pace, Luxembourg will be home to more than 2,000 such funds, known as Raifs, by the end of this year.

Hopes are high in Luxembourg that the Grand Duchy this year will be able to claim a sizeable chunk of a growing European market for Collateralised Loan Obligations (CLOs), a structured financial product pooling corporate debts. With an update in its securitisation regime that allows active management Luxembourg wants to be competitive and seduce CLO managers from other countries, notably Ireland, to move their business. 

Private banks in Luxembourg have seen their assets under management double since the 2007-8 financial crisis, according to a survey conducted by KPMG and the Luxembourg Bankers’ Association (ABBL). The report observed that growth at Luxembourg’s private banks in 2020 outpaced growth at their counterparts in Switzerland.

Private banks held 508 billion euro in assets at the end of 2020, up 9 percent from 466 billion euro a year earlier and more than double the 225 billion euro held at the end of 2008.

Luxembourg has decided to raise charges for supervising financial institutions by approximately 10 to 15 percent this year, according to an analysis of the Grand Duchy’s recent government decision. The increase was roughly 15 percent for banks, while investment firms were informed of increases of around 10 percent for 2022.