Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

August 28, 2017

Electronic Access:

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Summary:

Financial soundness indicators for Luxembourg’s financial system, which plays a key role in the intermediation of financial capital, have remained relatively robust in recent years. Rising asset prices and inflows have seen the investment fund industry enjoy strong growth in assets under management, while exposure to liquid assets has remained steady. The banking sector, where a relatively large share of liquidity and revenues derive from private banking and fund management activities, has maintained high levels of profitability, capital, liquidity, and asset quality. The insurance industry, which is relatively less exposed to guaranteed products than regional peers, has adjusted well to the new regulatory regime, maintaining high profitability and capitalization levels.