Raymond Frenken

The European Union needs to establish a single supervisory body for financial markets in order to boost the development of market finance towards creating a true single European financial market and turning the widely-discussed Capital Markets Union plans into reality. “We should not hide away from some unpleasant truths,” said Yves Mersch, former ECB board member. 

Two of Luxembourg’s top financial bodies are undergoing changes in key leadership positions. Former Fortuna Bank CEO Jerry Grbric this month took over from Yves Maas as chief executive officer of the Grand Duchy’s banking association ABBL, while Frank Wagener, long-time chair of the board of the Luxembourg Stock Exchange, will retire in May.

Although growth in Luxembourg’s alternative investment funds market slowed in 2020, it remained significant, bringing the total of alternative assets managed in the Grand Duchy above the 1000-billion-euro mark for a first time, according to new data released by financial regulator CSSF. 

Fund managers looking for sustainable investments can find themselves with incomplete non-financial data needed to make their decisions. At BLI - Banque de Luxembourg Investments, Annick Drui, manager of the 75 million euro BL Sustainable Horizon fund, explains how she is trying to strike the right balance.

If there is one economic lesson my father, a construction engineer, taught me, it’s that mortgage rates in Europe always follow what’s happening in the United States. When rates go up across the Atlantic, they’re bound to do the same in our part of the world. So when it comes to locking in a good mortgage rate, look west.

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.