Supervision

Luxembourg’s financial supervisor CSSF on Monday said it expects managers of Liability Driven Investment funds, also known as LDI funds, to maintain yield buffers set last year at levels introduced to make these funds resilient to the UK Gilts crisis.

Luxembourg’s top supervisor for investment funds on Wednesday assured the country’s fund management community, describing the sector as “very robust” and speaking about “quite normal” levels of volatility, even though it is not fully immune to the liquidity issues that have rocked global financial markets in recent weeks.

Negative global market sentiment against Swiss bank Credit Suisse meant Europe’s banking sector was under fire again on Wednesday, leading up to a evening statement by Swiss supervisors saying that they will commit liquidity to the bank.  The bank then said it plans to move swiftly to create “a smaller and more focused bank”.

“If necessary, the SNB will provide CS with liquidity,” the Swiss National Bank and regulator Finma said last night. 

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 concerns over how European banks handle increasing interest rates. The ECB reiterated that a recent 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.

Degroof, in a press release, pointed out that the CSSF inspection “did not reveal any illegal acts” but found “certain deficiencies” in the bank’s processes.

L’annonce faite par les agences de cybersécurité luxembourgeoises la semaine dernière, selon laquelle quelque 500 serveurs Microsoft Exchange «nécessitent une attention immédiate», a été reprise par le régulateur financier, la CSSF. Un expert international reconnu en matière de cybersécurité a établi un lien avec la difficulté de trouver les meilleurs talents en matière de cybersécurité au Luxembourg. «La difficulté que rencontrent les Luxembourgeois, et certainement les clients avec lesquels nous discutons, qui veulent travailler avec nous mais ne l’ont pas encore fait, est qu’ils ne trouvent pas les compétences nécessaires”, a déclaré George Ralph (photo) de Richard Fleishmann and Associates.

La CSSF, l’autorité de surveillance financière du Luxembourg, a attiré l’attention vendredi sur un avertissement des autorités de cybersécurité du Grand-Duché, selon lequel une «situation alarmante» a été créée parce que plus de 500 serveurs informatiques n’ont pas encore été mis à jour avec un correctif logiciel critique pour les serveurs Microsoft Exchange.

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”.