Annual Report - paperJam

Annual Report
Association des Banques et Banquiers, Luxembourg
The Luxembourg Bankers’ Association
Luxemburger Bankenvereinigung

Accounting
& Reporting
Banking supervision
Client protection
Clusters
Communication
Financial markets
& services
Legal & Tax
Payment systems & ICT
Social affairs
& Employers’
representation
Training
www.abbl.lu

Table of contents
Message from the Chairman 3
1. Financial markets regulations 10
- Pre-trade and Trade
- The AIFM and UCITS V
- The MIFID and the PRIPs
- Post-trade
2. Banking supervison 14
- Basel III
- EU Crisis Management Framework
3. Legal & Tax 16
- OECD: Amendments to more than
20 Luxembourg double taxation treaties
- EU: Political compromise on a directive on
administrative cooperation
- US: Foreign Account Tax Compliance Act
(FATCA)
- Regional: Taxation of commuters from
Germany
- The FATF Mutual Evaluation Report on
Luxembourg and its consequences
4. Payment systems & Ict 25
Payments
- Sepa
- Psd
- e-Money directive
- e-Invoicing
- Security of Payment Systems
and Payment Instruments
5. Social affairs & Employers’ representation 28
- The budget austerity package
- Remuneration policies under the
control of the supervisory authorities
- 2010 collective bargaining agreement
for bank employees
- Survey on the social situation
in the banking sector for the year 2009
- Healthcare and maternity insurance
- Accident insurance
- Pension insurance
6. Communication 34
- ABBL Communication in 2010
- Abbl events in 2010
7. Client protection 38
- Failure of Icelandic banks
- Developments at the European level
8. Clusters 41
- The Private Banking Group, Luxembourg
- The Retail Banking Group
9. Luxembourg for Finance 48
10. Training 50
- IFBL
11. Appendices 54
ICT
- Outsourcing
- Cloud Computing
- e-Archiving
- XBRL
- Fedil ICT
1

Message from the Chairman
Ernst Wilhelm Contzen
Chairman of the ABBL
As the waves recede …
“You can’t cross the sea merely by standing and staring at the water.”
Rabindranath Tagore
Following two years marked by the global economic crisis, 2010 could be described as the year of
economic recovery. And yet, as the waves of the crisis receded, they left behind a number of substantial
issues that will likely keep us on our toes for years to come, such as the sovereign debt crisis,
Basel III and the restructuring of the European banking landscape, amongst others.
Looking back at 2010
In response to the recent financial crisis, the regulatory landscape was re-written in 2010. At the
European level, EU member states found an agreement on the creation of a new EU supervisory
framework, covering both the micro-prudential and the macro-prudential dimensions. This new supervisory
framework should allow for better cooperation at the European level, while maintaining responsibility
for the day-to-day supervision of individual institutions with the national supervisors. The new
European System of Financial Supervision (ESFS) has been operational since 1 January 2011.
3

2010 also saw the Basel Committee agree on new capital and liquidity rules for banks; and this after
only a bit more than a year of negotiations compared to the 5 years it took to reach an agreement on
Basel II. The complete Basel III package will be gradually phased in until 2019. There is no doubt that
Basel III will have a significant impact on global banking. Higher capital requirements and stricter liquidity
rules will affect banks’ profit margins, and, together with other regulatory measures in the pipeline,
they could have widespread and unpredictable effects on banks, but also on our economies. In any
case, it is crucial that the new rules are globally implemented, and not just in Europe. Unlike for Basel II,
the US seems to be on board for the implementation of the new rules this time around. But there is still
a long way to go before Basel III is fully implemented.
Healthy competition presupposes that everyone plays by the same rules. This is
especially important when it comes to regulation. As a founding member of the
European Union, Luxembourg has always known how to compete and prosper
within a harmonised regulatory framework.
However, the financial crisis has awoken a number of nationalistic and protectionist reflexes that many
believed to have been discarded with the creation of a single market and increased globalisation. In the
aftermath of the crisis, there has been a growing tendency to re-nationalise financial markets and repatriate
clients’ assets.
The ongoing discussions on the implementation of an automatic exchange of information
in Europe are part of this trend. Not only would such an automatic exchange of
information jeopardize a global level playing field to the advantage of non-EU financial
centres, it would also discourage customer mobility and cross-border banking within
the European Union itself.
Indeed, the automatic exchange of information would only apply to non-resident clients. If customers
keep their bank account in their own country, they are exempt, since in many countries tax authorities
have no right to automatically receive account information from banks. Essentially, it would thus deter
clients from opening an account in a country other than their own. That this goes against the fundamental
EU rights of the free movement of people, capital and services is self-evident. Unfortunately,
this is not how most other member states see it. While these countries have sizeable domestic markets
of their own, Luxembourg relies on exporting its financial services. We can therefore not accept that
data from Luxembourg banks is sent throughout Europe, simply because we happen to have a largely
foreign clientele, while other member states mainly deal with domestic clients.

The ABBL thus keeps insisting on a withholding tax solution, which, together with the exchange of information
on demand, will maintain client privacy while providing an effective tool to combat tax evasion.
With the Foreign Account Tax Compliance Act (FATCA), enacted into law in March
2010 with an effective date of 1 January 2013, the US, for its part, seems intent on
forcing its national tax laws on foreign companies, by essentially turning banks around
the world into IRS enforcers for the accounts of US citizens. Besides being extremely
burdensome and costly to implement, the potential conflicts with Luxembourg and
European law could be far-reaching. Should a bank obey its national laws or should
it implement the US reporting requirements imposed by FATCA? Is it even worth the
trouble to keep US customers? These are questions that will continue to occupy
banks in Luxembourg and elsewhere over the coming months and years. FATCA is,
of course, not a specific Luxembourg problem. It is rather a case of the US against
the rest of the world.
Banks have been in the spotlight of regulators, politicians, the press and the general public ever since the
beginning of the crisis. In 2010, as the first buds of economic growth started to emerge and as the burden
of the crisis made itself fully felt in state debt, banks once more became the centre of attention. Someone
had to pay for the crisis and for tattered state finances, after all, so why not the presumed culprits?
For months, politicians and policy makers debated on how to best make the financial
sector pay: bank levy, financial transaction tax, or financial activity tax? No agreement
could be reached; neither at the European level nor at the G20. Deciding not to introduce
such measures unilaterally, Luxembourg rightly questioned the efficiency of punitive
taxes, which, however appealing they may be to taxpayers and voters in the short
term, risk having negative economic consequences in the long run. In combination,
forthcoming measures such as Basel III, a European resolution fund, revised investor
and depositor compensation schemes, mean that banks are bound to pay, whether
they want to or not. Adding various punitive taxes on top is neither in the best interest
of banks nor taxpayers.
5

The crisis hits home
With an economy largely dependent on exports and with 98% of banks being of foreign origin, it is
clear that Luxembourg and its financial sector are impacted by these international developments.
While, compared to other countries, Luxembourg seemed to be affected later by the economic crisis,
2010 was the year when the political, social and financial strains became more obviously apparent at
home. Indeed, until last year, many people in Luxembourg had not realised that the crisis had also affected
their country. And some still haven’t.
The fact that the trade unions insisted, in their negotiations on a collective bargaining
agreement with the ABBL, on increasing salaries by 8.4% over the next 3 years, clearly
illustrated that some parties still refused to acknowledge economic reality.
The extent to which perceptions of the crisis and its impacts diverged already became evident earlier
in the year when the tripartite negotiations failed in April 2010 after five fruitless meetings. For the employers’
association and for the ABBL, it was clear that the financial crisis had fully exposed structural
weaknesses that we have been pointing out for years and that the country can no longer afford to
ignore. In order to maintain a viable social welfare system, far-reaching healthcare and pension reforms
are unavoidable. After decades of rocketing, particularly when compared to neighbouring countries,
labour costs also need to be kept in check if the country wants to remain competitive internationally.
Business as usual is no longer an option. Sooner better than later, tough decisions will have to be
taken to steer the country in the right direction.
The financial sector has been the country’s job and growth engine for decades.
But it has taken a serious hit.
The banking sector has particularly suffered. Pre-Lehman, the net result of Luxembourg banks
was 4.6 billion Euros. A year later, in 2009, this had melted to 218 million. From December 2009
to December 2010, the result before provisions dropped by 20.8%. To make matters worse, this
coincided with increased costs. In 2010, for example, we saw a salary increase of 2.5% (indexation),
0.85% for accident insurance, 0.80% for the collective bargaining agreement, 0.1% for the national
health insurance: a cumulated increase of 4.25% at a time when profit margins are seriously shrinking.

Relative low non-wage labour costs have always been a competitive advantage for Luxembourg, and it
is something we should defend as employers. ABBL members contribute significantly to state revenues
and to the well being of the country: this is why our voice needs to be heard when it comes to taking
important decisions.
The bipartite agreement the employers’ representatives reached with the government
on 15 December 2010 does unfortunately not address the long-term structural problems
of the country. Some progress was, however, achieved.
The government has committed itself to freeze social contributions paid by employers: contributions rates
for the pension system and for health insurance will not be raised until 2014. The government has also
assured employers that it will not raise the contribution cap, currently at 5 times the minimum social wage.
The government moreover agreed to implement an expat tax regime for highly skilled employees, which
entered into force on 1 January 2011. The current situation should, however, only be the beginning. The
expat regime needs to be improved and developed in the coming years.
Outlook
One thing is certain, however: the crisis is definitely not over, neither worldwide nor in Luxembourg.
It is dangerous to remain idle and hope that the country will return to past growth rates and that the
structural problems will somehow sort themselves out as a result. Such an attitude is all the more
misleading, since it is unlikely that the financial sector will continue to grow at the same rate than it
did since the 1980s until the start of the financial crisis.
Moreover, as in most of Europe, Luxembourg is facing a ticking demographic time
bomb that can only be defused if the necessary measures are taken in a timely
fashion. As a small country that is particularly exposed to the whims of the global
economy, Luxembourg cannot hope to tackle these challenges by spending more
and by indebting itself.
I am aware that I may be painting a dark picture, but shutting one’s eye to economic reality is definitely
not an option.
7

Having said this, not all is doom and gloom. Over the decades, the Luxembourg financial centre has
developed an expertise and know-how that is unrivalled. We already have the right building blocks to
re-invent ourselves and to adapt to future challenges.
By adopting the internationally agreed OECD standard in tax information matters,
new avenues and opportunities have opened up. Luxembourg needs to adapt to a
world where clients have regularised their tax situations. This new reality is to be embraced.
We thus have to continue to push for a global level playing field and promote
Luxembourg as a competency centre that combines client confidentiality, financial
security and a high-level of sophistication.
Finance Minister Luc Frieden, as Chairman of the Senior Committee of the Financial Centre, recently
presented a vision for the future of the financial centre, relying on five business pillars: wealth management,
investment funds, international loans, insurance and structured finance.
Future growth in our private banking business lies in new markets and a new client
base. The focus will be more on attracting entrepreneurs and high net-worth individuals
with multi-jurisdictional interests, beyond our traditional clientele from the
Greater Region. The Luxembourg financial centre’s most significant strength lies
in the provision of cross-border services and products. Highly mobile international
clients, in particular, appreciate this.
Moreover, the introduction of a new expat tax regime for highly skilled employees will be an important
asset in attracting the necessary talent to service this more demanding and sophisticated clientele.
Luxembourg could further attract private equity fund managers and foster the development of asset
management skills, by clarifying and improving the taxation regime on carried interest.
Our cross-border expertise also lies at the heart of the success of our fund industry.
In December 2010, Luxembourg became the first country to transpose the UCITS IV
directive into national law – just as it did with the first UCITS directive back in 1988.
Again, the potential to further develop the financial centre is significant.

The introduction of the AIFM is an opportunity for Luxembourg to also establish itself as a brand name
for alternative investment funds and to attract front-office activities, such as hedge fund management,
for instance. The EU passport, in particular, will allow alternative fund managers to offer their services
and distribute their funds in all EU member states. Luxembourg, as the centre of choice for cross-border
fund distribution, will surely benefit from this development.
Luxembourg is also a hub for international large-scale loans. As the financial centre is
able to offer clients tailor-made financing structures, there is a clear potential to further
develop this business field and thus boost the country’s reputation as the financial
centre of choice for multi-jurisdictional financial services.
Luxembourg is already Europe’s leading domicile for captive reinsurance. With the recently announced
introduction of a specific status for insurance professionals, the so-called PSA (“professionnels du secteur
d’assurances”), the financial centre hopes to emulate, in the insurance industry, the success it previously
achieved with the creation of the Professionals of the Financial Sector (PFS) status.
Finally, Luxembourg’s sophisticated legal framework provides professionals with a great
number of flexible structures and investment vehicles. SOPARFI, SPF, SICAR, SIF: they
provide an ideal basis on which to diversify and adapt to an ever-evolving financial world.
The previous golden age of our financial centre may have come to an end, but new opportunities
abound. It has always been the ABBL’s task to make sure that Luxembourg establishes and maintains
the right regulatory and business environment that allows its members to seize these opportunities.
I can say with confidence that, as it has done in 2010, the association will continue to
put all its resources in the service of its members and of the Luxembourg financial centre.
In this context, I want to thank the ABBL Board members, the association’s members, in particular the
members of the various Committees and working groups, as well as our partners for their commitment
and their active participation in shaping a bright future for our financial centre. Finally, I would also like to
take this opportunity to thank the ABBL Management Board and the ABBL employees for all the work
they have done this past year.
Luxembourg, 15/02/2011
9

1.
Financial markets regulations
Pre-trade and Trade
In terms of day-to-day business, banks in 2010
were emerging from the great turbulences that
they had experienced in the previous years.
At the EU Commission level, however, things
worked a little bit differently. Indeed, after a
rather quiet period, the arrival of a new Internal
Market Commissioner marked a steep change
in the policy stance from the beginning.
In fact, 2010 served as a year of reflection and
preparation for the work to come over the next
years, with the exception of the finalisation of
the vote on the Alternative Investment Fund
Managers Directive (AIFM), which was adopted
by the European Parliament in autumn.
The AIFM and UCITS V
With regards to the AIFM, the complex discussions
between Member States on two issues are
worth reminding: on the one hand, the passport
for non-EU funds or managers and, on the other,
the rules on the depositary functions. The EU
Commission released the draft directive in April
2009, and a year later the major part was finalised
with some important, and most welcome,
changes across the board; specifically regarding
depositary activities. Another six months were
needed to complete the rules on the passport.
Concerning depositaries, the closer the possibilities
of control of assets by the depositary, the
bigger its duties and responsabilities. A difference
is made between safe keeping of assets (in the
safe keep of the depositary or its sub-custodians)
and oversight when financial instruments are not
held in the traditional value chain (i.e. for derivatives
and other contract-based instruments or
real estate properties). The bad news for the industry
is the “reverse of burden of proof” regarding
responsibilities, meaning that depositaries will
have to demonstrate that they did not fail in their
duties in case a loss of assets arises.
8 January 2010
Launch of “Is it true what they say about Luxembourg?”,
a promotional film project consisting of 10 films introducing
subjects ranging from finance to tourism in Luxembourg
with the aim to counter wide-spread clichés.
10

Regarding the passport, it took lengthy political
discussions to accommodate the very different
views of France and the UK. While the former
was willing to keep the regulation to the maximum
extent within the EU borders (i.e. require
a license for operating or managing or selling
a fund in the EU), the latter promoted a freer
option to favour the management or sale of
non-EU funds. In the end, a compromise would
introduce a complex procedure for registration
and selling in the EU with a grace period of up
to 3 years, during which the new ESMA agency
(European Securities Markets Agency) agrees
on the equivalence of the non-EU countries in
terms of financial, taxation and anti-money laundering
regulations. Level 2 measures still have to
be drafted to add further details to the numerous
existing requirements of the AIFM Directive.
At the end of the AIFM process, the EU
Commission realised that the rules regarding the
duties and responsibilities for depositaries were
much more detailed and the scope much wider
than for the retail UCITS funds. Thus, even before
the implementation of UCITS IV (July 2011), the
EU Commission launched a survey on amendments
to UCITS IV, up to UCITS V, specifically
regarding depositary rules in order to align both
regimes to the maximum extent. This project is
generally supported by the industry, subject, of
course, to the legislative details.
13 January 2010
Dubai International Financial Centre and Luxembourg for Finance
sign Memorandum of Understanding to promote cooperation and
industry development.
12 January 2010
Luxembourg and Bahrain sign cooperation agreement.
11

The MiFID and the PRIPs
The EU Commission launched a consultation
on the MiFID (Markets in Financial Instruments
Directive) in December 2010. It was composed
of nearly 150 questions on fields ranging from
market organisation to telephone recordings,
from the definition of advise or the impact of
High Frequency Traders on the markets to a full
revision of transparency rules on equities, bonds
and derivatives markets. The outcome is expected
by the end of January 2011, with a first
draft of amendments to the directive scheduled
for the middle of the second quarter, before the
regulatory procedure with the other EU institutions
can begin.
In a context closely linked to MiFID, the EU
Commission also worked on Packaged Retail
Investments Products, or the PRIPs: 2 page
documents that will replace current versions of
simplified documents for all collectively managed
or designed financial products for retail
clients. The ABBL is rather supportive of the
proposal -- although additional details may
change its view -- because it truly goes in the
direction of a better and more transparent
approach for clients. The KIID (the 2 page document)
will offer essential information on financial
products so that a private investor may be able
to compare and choose among various financial
products on the basis of risk, profiles or fees. The
PRIPs are likely to be implemented at the same
time as the reviewed MIFID, thus offering a high
level benchmark for offering financial investment
services in the EU.
Post-trade
If the EU Commission worked rapidly on the
pre-trade and trade level, it was not resting on
its laurels in post-trade. In September, the EU
Commission, in dogmatic line with the G20 agenda,
proposed a draft regulation on a European
status for clearing-houses that would have to
accept the maximum number of OTC traded derivatives.
The regulation also introduces the concept
of Trade Repositories (i.e. big data bases for
OTC derivatives). The objectives of the European
Market Infrastructures Regulation (EMIR) are to
be effective as of 1 January 2013, so as to comply
with the international agenda. The industry is
cautiously supportive of the project, because it
may bring an objective source of post-trade data
20 January 2010
ABBL Response to the Communication from the Commission
on an EU Framework for Cross-Border Crisis Management in
the Banking Sector.
ECOFIN: Luxembourg and Austria agree to directive on mutual
assistance in the recovery of taxes.
Conference Board: Luxembourg ranks 1 st in labour productivity.
12

at clearing-house level or Trade Repositories for
OTC derivatives. Yet not all such OTC products
are suited to be centrally cleared. Moreover, the
cost of such infrastructures may be very prohibitive,
notably because besides the fees for the
clearing, members of the clearing house will have
to set aside collateral, margins and participate
in a default fund or be subject to punitive capital
adequacy requirements. However, for the ABBL
the most critical issue is that, in absolute opposition
with what was the original objective, the
concentration of contracts on a small number of
clearing-houses will not improve systemic risk
management by the market and/or the authorities.
It will only increase the risk of failure and the
resulting systemic impacts if one clearing house
were to go bust.
Minor news on the T2S front: At ECB level
the project is ongoing and in the development
phase, even if delayed by a year until 2014.
A workshop was held in Luxembourg on funds
and T2S, organised by the ECB at the BCEE,
on the basis of an initial ABBL proposal.
At national level, the LuxCSD made significant
progress. The Luxembourg Central Bank and
Clearstream presented the project to the market
early in July and started work on the material and
operational deployment of the platform. Banks
were, in a first instance, rather interested in coinvesting
in the project, but opted to wait until
more concrete details and information become
available.
In 2010, the EU Commission also worked on a
second consultation on securities law in order
to harmonise how securities accounts are regulated
across the EU. The promised consultation
on CSDs (Central Securities Depositories) with a
view to harmonising their functions and status at
EU level had to be postponed until mid-January
2011 due to an excessive workload.
21 January 2010
Luxembourg ranks 14 th on the
Heritage Economic Freedom Index.
13

2.
Banking supervision
Basel III
Following an extensive process of consultation,
the Basel Committee published in December
2010 the capital and liquidity reform package,
the so-called Basel III agreement. The package
encompasses a new definition of regulatory
capital, the treatment of counterparty credit risk,
the leverage ratio, and the global liquidity standard.
The issues on which the ABBL was actively
involved in the consultation process relate to the
leverage ratio and to the liquidity standards.
Leverage ratio
The Basel Committee agreed on a long transition
period, until 1 January 2018, during which the ratio
will be run in parallel and calibrated in a more
detailed way. From 1 January 2018 onwards, the
leverage ratio will become binding under the form
of a Pillar 1 metric. The starting point for the parallel
run will be a leverage ratio of 3%. The ABBL,
and the banking industry in general, strongly
opposed the introduction of a binding leverage
ratio and proposed instead to keep it as a
Pillar 2 monitoring tool. In that respect, the Basel
Committee decision did not fully meet our expectations.
However, given the length of the transition
period, we believe that there is still leeway
for discussion and for a deep impact assessment
of such a metric on the banks’ business models.
Anyway, we avoided the worst-case scenario for
the banking industry, i.e. a binding leverage ratio
imposed as of 1 January 2012.
Liquidity rules
LCR: Liquidity Coverage Ratio
The LCR will become applicable on 1 January
2015, after an observation period.
Following a request from the ABBL, endorsed
by the European Banking Federation, the Basel
Committee has accepted to revise the run-off
factor of the operational funding received by
the custodian banks from investment funds, i.e.
such funding will be allocated a 25% run-off
factor instead of 100% in the initial proposal.
Concerning the buffer of high quality and liquid
assets, an extra buffer is created, limited to 40%
of the total buffer. This new buffer includes, with
a 15% haircut, government and public sector
entities assets risk-weighted at 20% under the
Standardised Approach, as well as corporate
bonds and covered bonds (not issued by the
bank itself) rated AA- and above. Additional eligibility
criteria related to the existence of a liquid
market, spreads and volatility of these assets
will be defined at a later stage.
Amongst other improvements agreed by the
Basel Committee, it is worth mentioning the lower
run-off factors for Retail and SME deposits, which
are reduced from 15% to 10% (for less stable deposits)
and from 7,5% to 5% (for stable deposits).
25 January 2010
KOF Economic globalization:
Luxembourg ranks 3 rd in economic
globalisation and 14 th for the global index.
28 January 2010
2010 Quality of Life Index: Luxembourg ranks 6 th .
14

NSFR: Net Stable Funding Ratio
The NSFR will be recalibrated and will become
applicable on 1 January 2018, after a testing
and observation period. This is a very positive
outcome for the Luxembourg banking industry,
given that this ratio was also a major concern
in light of the impact study conducted by the
CSSF and BCL.
Transposition into the EU legal framework:
CRD 4
The Basel III package will be transposed in
EU legislation by means of amendments to the
Capital Requirements Directive (the CRD). The
European Commission is expected to publish
the legislative proposal (CRD 4) during 2011, in
the form of a European Regulation (for the technical
matters) and of a Directive (for the organisation
of the European supervision).
EU Crisis Management Framework
The EU Crisis Management Framework is set
to be, apart from CRD 4, the most important
piece of financial reform in the field of banking
supervision. In early January 2011, the European
Commission issued a consultation document,
which follows the previous communication of
20 October 2010. A legislative proposal is
expected mid 2011.
The proposed framework aims to ensure that:
• National authorities are equipped with the
tools to intervene in a troubled institution at a
sufficiently early stage to address developing
problems;
• Firms and authorities make adequate preparation
for crises;
• National authorities have common resolution
tools and powers to take rapid and effective
action when bank failure cannot be avoided;
• Authorities cooperate effectively when dealing
with the failure of a cross-border bank;
• Financing mechanisms avoiding the use of
taxpayer monies are in place.
In close consultation with the Luxembourg
authorities, the ABBL will provide an individual
response to the Commission, and will actively
contribute to the position of the European
Banking Federation on this politically sensitive
topic.
3 February 2010
The ABBL updates the Luxembourg
SEPA Implementation and Migration plan.
15

3.
Legal & Tax
OECD: Amendments to more than 20
Luxembourg double taxation treaties
The conclusion and ratification by Luxembourg
of amendments to more than 20 double taxation
agreements (DTAs) intended to integrate
the OECD standard of 2005 raised a number
of technical questions amongst ABBL members.
The ABBL therefore elaborated a detailed
“Frequently Asked Questions” document that
has been discussed with the Luxembourg Tax
authorities. The 12 page document gives answers
to questions such as:
• When will the first requests for exchange of
information reach Luxembourg banks?
• What is the scope of the taxes covered
(direct taxes, succession duties, VAT, others)?
• How and in which form will information requests
be transmitted to the bank by one of the three
Luxemburg Administrations concerned:
Administration des Contributions Directes
(ACD), Administration de l’Enregistrement et des
Domaines (AED), Administration des Douanes et
Accises (ADA)?
• What is the exact definition of the “foreseeable
relevant” standard of the OECD model
convention?
• Who will inform the client of the bank:
the foreign or Luxemburg (tax) administration
or the bank?
• What about the “beneficial owner”?
• How to analyze the term “to the extent known”
when it comes to the (restricted) circle of
persons to be designated as the holder of the
information (the third party, notably the bank)?
• How will the ACD deal with requests concerning
multiple taxpayers (fishing expeditions)
and (collective or multiple individual) requests
based on illegally acquired information or a
“denunciation”?
• What is the delay for the bank to transmit
documents to the tax administration?
• Is the client of the Luxembourg bank allowed
recourse to the Luxembourg Court to verify
whether the conditions for a request of information
are fulfilled?
• Shouldn’t each bank communicate a specific
department in charge of receiving the notification
of the request from the local authority?
The answers to these FAQs (and others) can
be found on the ABBL ExtraNet for members.
8 February 2010
ABBL opinion paper on the draft law on non-profit
associations and foundations.
16

EU: Political compromise on a directive
on administrative cooperation
At the ECOFIN meeting of 7 December 2010,
the Ministers of Finance of the EU found a political
compromise on the directive on administrative cooperation
in tax matters between member states.
The adoption of this directive was closely followed
by the ABBL. The directive has a horizontal and
a vertical element.
In the vertical relation between the citizen and
the Governments (passing through banks and
other intermediaries), the future directive establishes
exchange of information on demand,
similar to the OECD procedures, as the general
principle within Europe. It will be fully applied
to cross-border relations with the 27 member
states as from 1 January 2013, and information
requests may cover fiscal years beginning with
1 January 2011. It presents the advantage that
Luxembourg does not need to conclude new
bilateral agreements with those member states
where the OECD standards from 2005 have not
yet been integrated.
In the horizontal relation between tax administrations
of different member states, and concerning
data that is already available at tax administrations
(because of a tax return, for instance) and thus
need not first be obtained from the (third party)
holder of the information, the directive provides
for automatic exchange of information on certain
categories of income. The situation between
member states will thus in principle be the same
as the situation between different authorities
within one single member state. This automatic
exchange will first begin with some categories of
revenues as from 1 January 2015. It could then,
after an evaluation process by the Commission,
gradually be extended to other types of income.
It is not foreseen, however, to extend it to portfolio
income subject to the Savings Directive.
US: Foreign Account Tax Compliance
Act (FATCA)
The US HIRE Act provides for a number of
measures aiming at maintaining and creating
jobs in the USA. The sources of funding to be
used to finance the job creation measures are to
be found under the FATCA (Foreign Account Tax
Compliance Act) section of the HIRE Act. FATCA
primarily deals with tax compliance obligations
of US investors with foreign accounts, reporting
obligations by US taxpayers as well as with antiabuse
measures in relation to lending and repurchase
transactions. It aims at ensuring that all US
taxpayers with accounts abroad and using foreign
entities are reporting their foreign earned income
and paying their taxes in the USA according to
US tax rules. FATCA introduces reporting obligations
by foreign financial intermediaries (FFI) on
US accountholders and certain US investors. It
further introduces penalties applicable to FFIs that
22 February 2010
FATF issues its evaluation report of anti money laundering in Luxembourg. Although Luxembourg
presents some features that are not fully in line with the FATF Recommendations, Luxembourg
has made commitments to further strengthen its national system for prevention, detection and
suppression of money laundering.
17

do not enter into an agreement with the Internal
Revenue Service (IRS). A new US withholding
tax of 30% is applied on interest, dividends and
gross sales proceeds (on the capital redeemed
or sold) paid to foreign financial intermediaries.
FATCA imposes upon FFIs the obligation to apply
specific client identification rules that go beyond
existing EU and / or domestic anti-money laundering
(AML) and know your customer (KYC)
rules. FATCA also imposes an obligation to close
accounts held by “recalcitrant” accountholders.
Recalcitrant accountholders are clients that do
not respect the additional conditions that the US
are intending to impose (compared to the KYC
rules applicable under the FATF and 3 rd anti-money
laundering directive rules) and do not provide
the FFI with specific documentation determining
their non US status. FATCA imposes upon FFIs
an obligation to report the number of recalcitrant
accountholders and their assets. It will become
applicable as of 1 January 2013.
Together with the European Banking Federation
(EBF), the ABBL has submitted to the US authorities
(notably to the IRS) numerous comments and
proposals in relation to the provisions of FATCA.
There has been a feeling of frustration amongst
many EBF members following the release of
Notice 2010-60 by the US Treasury, as the notice
clearly shows that the Treasury and the IRS are
not interested in looking into the conceptual
proposals that have been drafted with great care
by the European banking industry. It should be
emphasised that the preoccupations expressed,
which led to the very detailed and substantial
proposals, were shared by many other financial
centres in the world, like Japan, Canada, etc.
The release of notice 2010-60 and its ensuing
analysis can only lead to the following
conclusion:
• The FATCA provisions are not implementable
by European banks without the allocation of
enormous and disproportionate financial and
human resources;
• This is even more true for smaller Foreign
Financial Intermediaries (FFIs) concerned,
which, in contrast to much lower US estimations,
are estimated to easily reach a figure
of 100,000 entities in the world;
• Future US guidance with respect to FATCA is
expected, and this will very probably add new
layers of complexity;
• The ongoing administration of the FATCA
regime will in itself consume considerable
amounts of banks’ internal resources.
25 February 2010
Presentation of the Fit4Job pilot program, jointly developed
by the Ministry of Labour, ADEM, the ABBL and the IFBL
with the aim to accompany persons made redundant in
the financial sector to be re-employed.
18

FATCA rules will enter into force on 1 January
2013. FFIs need to take important financial and
IT decisions now. But there is no guidance on
implementation from the US.
FATCA rules will further create conflicts with local
law, such as:
• Obligation to identify, document and screen
clients to an extent that goes largely beyond
European AML-KYC laws;
• Obligation to report automatically to the IRS
on US and also non US clients;
• Obligation to close accounts of US and also
non US clients that do not comply with the
information requirements;
• Obligation to apply US withholding tax to non
US persons under an obscure “pass-thru”
concept that transforms non US income into
US income;
• Obligation to waive Double Taxation Agreement
rights under the concept of “election to be
withheld upon”.
direct effect on the tax income left for the Treasury
of each country in which compliant FFIs operate
while not providing any benefit to that country in
exchange. On the other hand, the declared aim
of the law to cover as many foreign intermediaries
as possible is destined to fail, as the implementation
will be too complex and too costly. The large
number of FFIs to be controlled by the IRS will
considerably increase administrative cost in the
US. This has triggered and continues to trigger
strategic reflections by certain European FFIs
to refuse to open accounts to any person with
an US status and even to completely disinvest
from US securities. There is a serious risk that a
two-tier system will be created in the world with
intermediaries respecting the new rules and others
who do not. Such an evolution can neither be in
the interest of Europe nor of the US.
The ABBL continues to lobby for rules that are
not completely disproportionate to the objectives
to be reached.
Due to the great complexity of the provisions,
and the perspective of a very weak cost/efficiency
relation, the cost of implementing FATCA in FFIs
will considerably erode the taxable income of
these intermediaries, which will in turn have a
8 March 2010
After talks in Luxembourg, German Chancellor
and Luxembourg Prime Minister propose
to establish a European monetary fund.
4 March 2010
New strategy replacing the Lisbon Agenda:
The EU Commission launches the Europe 2020 Strategy.
19

Regional: Taxation of commuters from
Germany
Article 10 of the double taxation agreement
between Germany and Luxemburg contains two
important paragraphs dealing with income in the
form of salary in bilateral cross-border situations:
Paragraph 1 establishes the general rule as to
the taxation of income from employment, namely
that such income is taxed in the State where
the employment is actually exercised. This is
standard in all double taxation agreements in the
world. Paragraph 2 contains a general exception
to the rule in paragraph 1, the famous “less than
183 days rule”. This rule is of primordial importance
for employers evolving in a cross-border
environment. It allows them to send an employee
to another State for a period of less than 183
days, without obliging the employer to undergo
complex (tax or other administrative) registration
procedures in the country to which the
employee is sent. For short-term postings (less
than ½ a year), the country where the employee
is sent thus renounces on its general right to tax
the employment income, because the work is
exercised on its territory. This rule, which is also
a worldwide standard, is explained in the official
commentary to the OECD model agreement
(point 6.2) as follows:
“The object and purpose of … paragraph 2 are
to avoid source [= country of temporary physical
presence] taxation of short term employments
to the extent that the employment income is not
allowed as a deductible expense in the State of
source, because the employer is not taxable in
that State as he neither is a resident nor has a
permanent establishment therein. These subparagraphs
can also be justified by the fact that
imposing source state deduction requirements
may be considered to constitute an excessive
administrative burden where the employer neither
resides nor has a permanent establishment
in that State.”
While paragraph 1 of article 15 of the OECD
model agreement thus only mentions the
employee, paragraph 2 of the same article
addresses the employer and the employee.
Germany recently unilaterally changed its interpretation
of paragraph 2 and does not want to
recognize anymore the fact that it has renounced
– in favour of the employer and the employee -
on its taxation rights for short term postings (less
than 183 days). The renunciation is considered
valid only for employees residing in the same
country as the employer. Germany further wishes
to apply this new interpretation retroactively.
This leads to a very unfortunate double taxation
situation.
The ABBL continues to lobby and to negotiate
to find a short-term solution for this – barely
believable - European accident.
17 March 2010
Beginning of the Tripartite negotiations.
20

The FATF Mutual Evaluation Report on
Luxembourg and its consequences
The FATF report on Luxembourg was published
on 19 February 2010. The rating of compliance
vis-à-vis the FATF Recommendations is rather
mitigated: on the 40 + 9 recommendations, 9
are non-compliant, 30 are partially compliant, 9
are largely compliant and only one is compliant.
Following the publication of this report, a large
number of acts were adopted, among which:
• Grand-ducal regulation of 1 February 2010
providing details on certain provisions of the
amended Law of 12 November 2004 on the
fight against money laundering and terrorist
financing;
• The Law of 3 March 2010 introducing criminal
liability for legal persons;
• The Law of 27 October 2010 embodying
1. Approval of the Convention of 29 May 2000
on mutual assistance in criminal matters
between the Member States of the European
Union; 2. Approval of the Protocol of 16
October 2001 to the Convention on mutual
assistance in criminal matters between the
Member States of the European Union;
3. Amendment of certain provisions of the
Code of criminal investigation and of the Law
of 8 August 2000 on international mutual
judicial assistance in criminal matters;
• The Law of 27 October 2010 enhancing the
anti-money laundering and counter terrorist
financing legal framework; organising the
controls of physical transport of cash entering,
transiting through or leaving the Grand Duchy
of Luxembourg; relating to the implementation
of United Nations Security Council resolutions
as well as acts adopted by the European Union
concerning prohibitions and restrictive measures
in financial matters in respect of certain
persons, entities and groups in the context of
the combat against terrorist financing.
Criminal liability for legal persons
The introduction of criminal liability for legal
persons in Luxembourg law allows Luxembourg
to be plainly compliant with its international
commitments. The criminal liability of legal
persons applies to all legal persons (except the
State and the municipalities) and applies to all
crimes or offences provided by the Penal Code
and the special laws. However, the following
conditions have to be fulfilled: firstly, the crime
or the offence must have been committed “in
the name and in the interest of the legal entity”;
secondly, the crime or the offence must have
been committed “by one of its legal bodies or
by one or some of its legally appointed or de
facto director/manager”. The criminal liability
of legal persons does not exclude the criminal
responsibility of the individuals, perpetrator or
accomplice of the offence.
18 March 2010
Moody’s issues annual sovereign report on Luxembourg.
The Aaa rating on the debt issued by the government of
Luxembourg is underpinned by low debt and substantial
financial buffers.
21

Mutual assistance in criminal matters
The purpose of the law on mutual assistance
in criminal matters is to approve two texts of
European conventions in the field of mutual
judicial assistance in criminal matters: the
Convention of 29 May 2000 and the Protocol
of 16 October 2001. The 2001 Protocol tends
to broaden the scope of mutual assistance
between the Member States and, in particular,
sets out rules applicable to applications for mutual
assistance concerning bank information.
The 2001 Protocol requires each Member State,
upon request and in certain specific cases, to
take the measures necessary to provide the applicant
state with 1°) information specifying whether
a particular person holds or controls one or more
bank accounts at a bank situated on its territory
and 2°) in a second step, information on banking
operations which have been carried out during
a specified period on this account. The Member
States shall also adopt internal measures enabling
transactions effected on an account to be supervised
for a particular period of time.
Credit institutions shall not reveal to the client
concerned or to third parties (without the express
prior consent of the authority which ordered the
measure) the fact that documents have been
seized or that documents or information are to
be communicated to a foreign State as a result of
the execution of a request for mutual assistance.
The right to inform the client still exists if funds
are seized. The right of recourse of the client is
replaced by an automatic verification of the
regularity of the proceedings by the Chambre du
Conseil. When his accounts have been seized, the
client is allowed to present a memorandum within
ten days of notification of the act to the bank.
New law on money laundering
The law of 27 October 2010 amended some 21
existing laws. Its purpose is to respond to FATF
criticisms of the Luxembourg rules on the prevention
of money laundering and the financing of
terrorism.
The law somewhat extends the list of primary
offenses, the definition of the offence of money
laundering, and the categories of professionals
concerned. The law confers a legal existence on
the Financial Intelligence Unit (FIU). The unit itself
is placed under the authority of a deputy public
prosecutor. It has exclusive nationwide authority
in the area of the prevention of money laundering
and the financing of terrorism. The law now defines
clearly its missions.
14 April 2010
13 April 2010
Luxembourg for Finance and Mosfinagency sign
a Memorandum of Understanding to contribute to
the development of both financial centres.
ABBL Response to the Basel Committee’s Consultative
Document “International Framework for Liquidity Risk
Measurement, Standards and Monitoring”.
ABBL Response to the Basel Committee’s Consultative
Document “Strengthening the Resilience of the Banking Sector”.
22

In respect of professional obligations, professionals
are required to make an analysis of the
risks of their activities. They must set down the
outcomes of that analysis in writing.
Instead of an outright exemption from the obligations
of vigilance when the client is a credit
institution or a financial institution governed by
the Luxembourg law, the new law allows professionals
to apply less stringent measures of
vigilance. In cases where professionals were not
obliged to apply the requirements of vigilance
(when the client is a listed company, the beneficiary
of a group account held by a notary or an
attorney-at-law, a public authority, a legal entity
with a low risk of laundering), the professional
can apply less stringent measures of vigilance.
The less stringent obligations of vigilance apply
solely to measures for the identification of the
client and beneficial owner. The other measures
of vigilance (obtaining information about the
purpose and nature of the business relationship,
supervision of the transactions, updating the
information) still apply. Application of this regime
is possible only if the professional has sufficient
information to enable him to conclude that the
risk is low.
The notion of a politically exposed person (PEP)
(on which measures of more stringent vigilance
are applied) has been extended and now also
includes heads of political parties. Moreover, the
law also included, in the notion of a “politically
exposed person” direct members of family, by
which is meant “the spouse, any partner regarded
by domestic law as being equivalent to a spouse,
children and their spouses or partners, parents”.
The new law adds the words “in particular” to the
reference in order to avoid any limitation to such
designated persons. The aim here is to comply
with the FATF recommendations, which indicate
that the notion of a “direct member of family” of a
politically exposed person must also include his or
her brothers and sisters. Moreover, the measures
of more stringent vigilance do not apply solely to
PEPs residing in another country but likewise to
persons who hold a public office abroad even if
they reside in Luxembourg and to persons who
perform such duties for the account of a foreign
state (for example, foreign ambassadors residing
in Luxembourg). The measures of more stringent
vigilance apply not only when the client is a PEP,
but also when the effective beneficial owner is
such a person. Finally, the measures of vigilance
likewise apply to clients and beneficial owners
when it transpires later on that they are PEPs
or become PEPs.
15 April 2010
ABBL Response to the Commission
Consultation on possible Changes to
the Capital Requirements Directive.
23

Concerning the cooperation with the authorities,
professionals are required to inform the FIU
“without delay”. The declaration “must be accompanied
by all the information and documents on
which the declaration was based”. Moreover, the
“obligation to declare suspect transactions applies
without the declaring parties being required
to qualify the underlying offence”. Concerning the
fight against terrorism, the compulsory declaration
likewise applies to “funds for which there
are reasonable grounds to suspect, or which are
suspected, of being linked to or connected with
or likely to be used for terrorism, terrorist acts,
associations, organisations or terrorist groups or
to those which finance terrorism”. This formulation
covers the criteria of suspicion both subjective -
the person who suspects - and objective when
there are reasonable grounds for suspicion, i.e.
the suspicion can be verified if the circumstances
surrounding the transaction normally lead to a
person in whose case it is reasonable to suspect
that the transaction is linked to a criminal activity.
The new law introduces specific provisions governing
instructions for placing a stop on accounts.
Previously the instruction for placing a stop applied
for a maximum period of three months, but it
can now be renewed for one month in each case
subject to a maximum of six months. Written confirmation
from the FIU is sent to the professional
and “in the absence of written confirmation the
effects of the examination cease on the third
working day at midnight”. As is the case at
present, the professional is not authorised to
disclose this examination to the client without the
express prior consent of the FIU. The latter can
use its blocking power even in the absence of any
declaration of a suspect transaction. Professional
secrecy does not apply to the FIU. The declarations,
information and documents supplied by
a professional cannot be used against him in
proceedings for breach of professional obligations.
The purpose of this provision is to assure protection
for the professional who effects a declaration
of a suspect operation against the risk of incriminating
himself.
The law substantially increases the maximum
rate of the fine applicable to persons who have
knowingly contravened their professional obligations:
it is increased from 125,000 euros to
1,250,000 euros.
The powers of the CSSF to impose penalties
have likewise been strengthened: it may impose
fines ranging from 250 to 250,000 euros (previously
125 to 12,500 euros). Over and above such
fines, it may impose a warning, a reprimand or
even a prohibition, either for a limited period or
permanently, from effecting or pursuing one or
more transactions or activities, or a prohibition
either temporary or permanent from serving as a
board member, manager or de facto or de jure director
of the bodies and entities which are subject
to its supervision. The CSSF may likewise impose
obligations requiring the persons concerned to
comply with the injunctions of the CSSF.
27 April 2010
After 5 meetings of the Tripartite coordination committee, the
government and the social partners fail to find an agreement.
24

4.
Payment systems & ICT
Payments
The various payments related issues are handled
by the Payments, Information Systems
& Standardisation Committee and its specific
Working groups.
SEPA
As there are still many members of the
Luxembourg banking community (ABBL
members and non-members) that were not yet
SEPA compliant at the end of 2009, the ABBL
continued to act as NASO (National Adherence
Support Organisation), i.e. by supporting
banks when adhering to the various payment
schemes: Sepa Credit Transfer (SCT), Sepa
Direct Debit (SDD) Core, and SDD B2B.
Throughout 2010, the ABBL continued to provide
operational monitoring and administrative
services to the banks as requested by the SEPA
scheme adherence rules. These services encompassed
the handling of operational problems,
such as reachability issues, as well as the billing
of annual SEPA/EPC fees.
The ABBL continued to actively participate in the
design, implementation and running of current
(SCT, SDD, SCF) and future (Fixed amount, e-payments,
m-payments) EPC and SEPA schemes,
taking part in the various international and national
working groups.
In 2010, major efforts were undertaken to clarify
the legal basis of using existing mandates in the
new direct debit schemes.
PSD
After the transposition of the Payment Services
Directive (PSD) into national law in November
2009 and the successful launch of PSD compliant
payment services, banks had to concentrate
on other issues that were still open. The guide for
Payment Service Providers issued by the ABBL
at the end of 2009 was updated in line with the
findings and recommendations by the European
banking community. Here, the ABBL continued
to take part in the PSD Industry Expert group set
up by the European Banking Federation, which,
at the end of 2010, was given the mission to
monitor and accompany any future regulation in
the domain of payments.
e-Money directive
The ABBL closely monitored the transposition
process initiated by the Ministry of Finance and
contributed to the opinion papers issued by the
Chamber of Commerce.
19 May 2010
Luxembourg national central security depositary
LuxCSD is launched.
The EU Commission proposes more information
sharing and direct oversight for pan-European
supervision of credit rating agencies.
21 May 2010
Luxembourg ranks 11 th in the
IMD World Competitiveness Yearbook 2010.
25

e-Invoicing
After the publication of the report of the
e-invoicing expert group and the closing of the
public consultation, the ABBL set up a specific
working group, which began work in 2010 on
elaborating an e-invoicing framework, allowing
banks to define their position in this new domain.
At the end of 2010, the European Commission
issued a communication and decision, which
should push the development and uptake of
e-invoicing throughout the European economy,
in particular by small and medium-sized companies
and their corporate and private customers.
The ABBL started to closely monitor the
establishment of the future Luxembourg Multi
Stakeholder Forum on e-invoicing, as requested
by the European Commission. It is commonly
agreed that banks should be involved in this forum
in order to defend payment activities and combat
disintermediation.
Security of Payment Systems and Payment
Instruments
On the basis of the law of 11 November 2009
on payment services, which placed the security
of payment systems and instruments under the
supervision of the Luxembourg Central Bank,
the ABBL decided in 2010 to extend the mission
of its existing working group dealing with web
banking security issues only in order to cover
the new dimensions targeted by the law. The
extended mission also covers the handling of
ATM related fraud.
The Security of Payment Systems and Payment
Instruments working group continued to liaise
with CASES, the Luxembourg judicial police
and the Luxembourg intelligence service.
As it had done in 2008 and 2009, the ABBL
supported the hack.lu 2010 conference as a
sponsor. Over the last years, the hack.lu event
has become one of the most important worldwide
yearly gatherings of ICT security specialists
seeking solutions to fight cybercrime and
to make the usage of Internet channels safe
for customers as well as banks.
ICT
Information and communications technology
(ICT) is a corner stone of the banking business.
In 2010, the ABBL was thus monitoring several
issues of high relevance to its members. These
issues were discussed and outlined during a first
Financial ICT Forum (FIFo) workshop, bringing
together interested members.
The aim of the FIFo workshops is to allow the
ABBL to answer strategic questions raised by
ministries and other public authorities keen to
know the banks’ position and requirements.
26 May 2010
EU Commission proposes that the EU establishes
an EU network of national bank resolution funds to ensure
that future bank failures aren’t at the cost of the taxpayer.
26

Major topics that should be mentioned here are:
Outsourcing
Outsourcing solutions and especially the corresponding
legal framework may provide appropriate
answers to the growing pressure on
the efficiency and costs of ICT solutions to be
implemented by banks.
Cloud Computing
Developments in cloud computing, which is
an emerging specific type of outsourcing, were
closely followed by the ABBL to ensure that the
legal and technical frameworks are in place, allowing
banks to rely on cloud computing based
solutions if they so wish.
Via the EuroCloud Luxembourg association, the
ABBL and some of its members started to work
on a cloud computing study taking into account
the specificities of the Luxembourg economy.
This study, which will be submitted to the Ministry
of State, will contain recommendations regarding
the legal, technical and promotional frameworks
that cloud computing service users and providers
need.
e-Archiving
The drafting of the new legal framework on electronic
archiving and the implementation of compliant
solutions was another major issue covered
by the ABBL in 2010. Our association is one of
the main interlocutors of the Ministry of Economy
and Foreign Trade, which is currently drafting this
new legal framework. The ABBL has become
a member of FEDISA, the national platform for
e-archiving related issues, where it will represent
its members’ interests.
For synergy reasons, the ABBL working group
on e-archiving was transformed into a joint
ABBL/FEDISA Working Group, with a view to
closely analyse financial sector related issues.
XBRL
The ABBL, as founding member of the XBRL
Luxembourg jurisdiction, closely accompanied
the evolution of the existing XBRL based
COREP/FINREP reporting and took an active
part in the governance of XBRL Luxembourg,
XBRL Europe as well as XBRL International.
Fedil ICT
During 2010, the ABBL continued to liaison with
Fedil ICT and closely cooperated with the industry
association Fedil on common ICT issues, be
they of a technical or regulatory nature.
3 June 2010
The IMF Executive Board notes that Luxembourg with its
open economy and large internationally-integrated financial
sector experienced a severe shock from the global financial
crisis. It commends the authorities’ prompt and forceful
policy response, which safeguarded the financial sector.
27

5.
Social affairs & Employers’ representation
The budget austerity package
In 2010 began the long awaited negotiations
on the methods and means of how to reach a
budgetary equilibrium of the Luxembourg public
administration by the year 2014.
After several encounters between the government
and the social partners on an individual
basis, the tripartite committee sat together four
times. These talks were held in parallel with
other planned wide-ranging reforms, namely
health and pension reform, as well as the reform
of the remuneration policy of the public sector.
In April, however, Prime Minister Jean-Claude
Juncker declared that the talks had failed. The
issue of the state of competitiveness of the
Luxembourg economy (the trade unions refused
to acknowledge the analysis made by public
officials as well as the representatives of the
employers’ organisation) and the issue of the
indexation of salaries (a governmental proposal
to cap the level of indexation at a certain height
of salary was also categorically refused by the
trade unions) were the reasons for the failure of
the tripartite committee. The talks emphasised
the huge gap between the social partners, and
they also uncovered the ideological discords
within the governmental coalition, which nearly
provoked early elections.
After the State of the Nation speech by Prime
Minister Juncker in May, the government submitted
its own savings packet for 2011, which
notably introduced a 0.8% crisis contribution,
a new maximum fiscal threshold of 39%, and
an increase of the solidarity tax.
Discussions with the social partners only resumed
after the summer break in October, in the shape
of a bipartite model, between the government
and the trade unions, and later on in November
and December, between the government and
the employers’ organisation.
To the dissatisfaction of the employers’ organisations
no structural reforms but merely small adjustments
resulted from that round of discussions.
Those adjustments can be summed up as follows:
• an increase in the State participation in
employers’ professional training costs;
• a reimbursement by the State of employers’
cost of the minimum social salary increase of
1 January 2011, to be paid into the “Mutuelle
des employeurs” and redistributed internally;
• the government‘s commitment not to raise
social contributions until the year 2014.
14 June 2010
The ABBL hosts the European Banking Federation’s
Anti-Fraud & Anti-Money Laundering Committee and
Physical Security Working Group.
28

Remuneration policies under the
control of the supervisory authorities
Following multiple discussions on the financial
crisis at an international and European level, 2010
saw the scope of competence of the Luxembourg
supervisory authority extended to include remuneration
policies.
Indeed, inadequate remuneration policies
were identified as one element putting at risk
the financial stability of financial institutions. In
February, the Commission de Surveillance du
Secteur Financier (CSSF) published Circular
10/437 relating to guidelines on remuneration
policies in the financial sector. According to
these guidelines, internal remuneration policies
have to be sound and transparent. Guaranteed
variable remuneration must be an exception.
The financial institutions under the supervision of
the CSSF were asked to hand in their new remuneration
policies by September 2010.
In July, the European Parliament voted the Capital
Requirements Directive 3 (CRD 3), which was
transposed into Luxembourg law in December
2010. The CRD3 is applicable without a transitional
period from 1 January 2011 onwards.
In April 2010, the ABBL organised a conference,
together with the CSSF, on the matter of the
remuneration policies. An ABBL working group
elaborated guidelines for its members on how
best to react to the CSSF. Another ABBL working
group is analyzing the conflicts between labour
law and the circulars.
2010 collective bargaining agreement
for bank employees
As the collective bargaining agreement had been
extended for the year 2010, the parties gave
notice of termination at the beginning of October.
The termination was followed by two negotiation
rounds, but after two meetings the parties realised
that their positions were incompatible for the time
being and the ABBL’s negotiation team left the
table waiting for constructive proposals by the
trade unions.
While negotiations were still pending at the end of
the year, the ABBL’s Board issued the following
recommendations for the payments of 1 January
2011 for employees falling under the scope of the
collective bargaining agreement:
• Payment of seniority steps for groups I and II;
• Payment of the guarantee linked to seniority
for groups III to VI;
• No increase of the scales, no individual linear
increase and no overall envelope for merit
based increases;
• Payment of the seniority allowance.
21 June 2010
The Basel Committee on Banking Supervision
agrees on certain adjustments to the document
Revisions to the Basel II market risk framework.
ABBL opinion paper on the draft law on a consumer code.
24 June 2010
The EU Commission asks Luxembourg
to amend its legislation on inheritance tax.
29

Survey of the social situation in the
banking sector for the year 2009
The ABBL once again made its annual survey of
the social situation to analyse the relevant data
for the sector.
The participation rate was again high at 56%,
covering 72% of the employees of member
banks of the ABBL.
The survey revealed that the average age of men
had risen from 39 to 41, while that of women
remained unchanged at 38.
Among all employees, average seniority rose in
the case of both men and women: for men it
increased from 6.9 to 9 years, while in the case
of women the increase remains less pronounced,
rising from 8.2 to 9.6.
An analysis of the countries of residence of
the new recruits shows that the percentage of
Luxembourg residents has risen from 34.4% to
46.7%, while the number of French and Belgian
frontier workers recruited has fallen.
Luxembourg residents continue to represent the
largest share of all employees. There was a slight
increase in French residents, while the numbers of
their Belgian and German counterparts fell slightly.
As to the nationality of employees in our sector,
Luxembourg and French citizens remain in a large
majority followed by Belgians and Germans.
Country of residence of new recruits
Others
0.91% 0.15%
Germany
13.94%
10.30%
MEN
France
9.85%
7.88%
WOMEN
Belgium
6.21% 4.09%
Luxembourg
29.09% 17.58%
0% 10% 20% 30% 40% 50%
Country of residence
Others
0.11% 0.03%
Germany
7.71% 5.96%
MEN
France
10.60% 10.61%
WOMEN
Belgium
9.02% 6.69%
Luxembourg
26.30%
22.96%
0% 10% 20% 30% 40% 50%
30

Distribution by level of studies
The percentage of employees with a university
degree (bachelor and master) continued to increase,
rising from 59.4% to 61.9%.
Distribution by level of studies
Healthcare and maternity insurance
With the presentation of the healthcare reform,
2010 was a year of controversial debate surrounding
health and maternity insurance and its
financing. The ABBL was involved as employers’
organisation at various levels: tripartite, quadripartite,
administrative and inter-professional.
Studies < BAC
bac
Bachelor (BAC +2/3)
Master (>/= BAC +4)
16.96%
34.42%
21.18%
27.44%
The healthcare and maternity insurance budget
and its financing
In the view of the representatives of the business
sector, which is a joint manager of the system,
structural reform of the healthcare branch
is essential in order to deal with the explosion of
expenditure which has been rising constantly at
an annual average rate of 5.1% since 2001.
Group I
Distribution by duty group
As to the assessment of the data for the distribution
of employees by duty group, the percentages
have remained broadly unchanged and reflect the
following situation:
Distribution by duty grouP
0.77% 4.94%
10.45%
According to the calculations made by the
“Inspection générale de la sécurité sociale” (IGSS)
in October 2010, the aggregate deficit is liable to
grow to 660 million euros in 2014, barring a return
to years of growth of GDP and employment
numbers. The healthcare and maternity insurance
must therefore undergo far-reaching reform leading
to a substantial limitation of expenditure.
Experience shows that with the present tripartite
membership of the CNS management committee
(employers, trade unions, administration), which
is responsible for drawing up the healthcare and
maternity insurance budget, the easy solution of
Group II
Group III
Group IV
19.40%
32.59%
Group V
Group VI
31.84%
28 June 2010
EU and US sign SWIFT agreement on the transfer
of information on international bank transfers concluded
through SWIFT to U.S. counter terrorism authorities.
27 June 2010
G20 leaders fail to reach an agreement
on implementing a global banking levy.
31

aising contributions is systematically adopted
because of the bipartite alliance between the
trade unions and the administration.
As the insured persons are the sole beneficiaries
of the healthcare system, the long-term solidarity
of business interests with a healthcare system
whose costs far exceed the assumption of what
is useful and necessary is gradually being eroded.
In its road map for healthcare, the UEL has made
a proposal that the contribution paid by businesses
should be frozen at the current level of the
employers’ contribution, so exempting businesses
from any future increase.
The healthcare reform:
law of 19 December 2010
The hasty vote of a healthcare reform in 2010
shows just how apt our above remarks in fact are:
Although a structural reform had been announced,
the final outcome will certainly not
enable the shortcomings of the system to be
made good.
The employers’ organisation advised the
Government, but without success, to withdraw
the text which had been deprived of all substance
during the procedure and to rework it entirely.
While welcoming certain measures, such as the
substitution of pharmaceuticals, the introduction
of the shared care dossier and better coordination
of the hospital sector, we can only regret the
fact that good governance of the social security
institutions – essential to guarantee sound and
efficient management of healthcare insurance –
has not in fact been touched upon.
Accident insurance
The year 2010 saw two reforms of accident
insurance: the law of 12 May 2010 covering
technical aspects based on an opinion paper
by the Economic and Social Committee in 2001
and the introduction of a single contribution rate.
The employers’ organisations, including the
ABBL, finally subscribed to the solidarity-based
approach, provided that financial incentives are
maintained for businesses with a view to the
prevention of accidents at work. A bonus-malus
system will accordingly have to be introduced
before the end of the current legislative period
in order to reward the efforts made by companies
in the area of safety and health at work.
Pension insurance
With the reforms of the health and accident
insurance schemes, that of pension insurance
was sidelined. This reform will be the main political
issue of 2011. The employers’ organisations
will continue to insist upon the need for action
in the field of pensions. The UEL had already
made its proposals to the Government in 2009.
09 July 2010
ABBL Response to the EU Commission’s Public
Consultation on Derivatives and Market Infrastructures.
ABBL Response to the EU Commission’s Public
Consultation on Short Selling.
32

The ABBL sees a vital need to maintain the
competitive advantage for companies arising
from the fact that labour costs are not particularly
high in Luxembourg. With that end in view,
the Government must respect the letter of the
bipartite agreement concluded in December
2010 and give up any idea of increasing or
removing the ceiling from contributions so as
not to generate untenable future promises.
Quite the contrary, one path to be explored is
that of a reduction of the basis of assessment
of contributions which would then enable future
benefits to be reduced.
Social parameters of the financial sectors in 2011
Employee’s share
Employer’s share
Health insurance 3.05% 3.05%
Benefits in kind 2.80% 2.80%
Cash benefits 0.25% 0.25%
Employers’mutual scheme
(see below)
Pension insurance 8.00% 8.00%
Dependency insurance 1.40% /
Family allowance
paid by the State for the private sector
/ 1.70%
ASTF / 43 € per employee per year
Accident insurance single rate / 1.15%
Minimum contributing income as of January 1 st 2011 (Minimum Social Salary): 1,758 € per month current index
Maximum contributing income as of January 1 st 2011 (5 x Minimum Social Salary): 8,788 € per month current index
Contributions to the Employers’ mutual scheme for 2011
Risk classes Class 1 Class 2 Class 3 Class 4
Rate of financial
absenteeism
< 0.75% < 1.75% < 2.75% ≥ 2.75%
Contribution rates 0.62% 1.48% 2.01% 2.38%
33

6. Communication
ABBL Communication in 2010
A renewed focus on communication
In April 2010, the ABBL elected a new chairman.
From the outset, Ernst Wilhelm Contzen made
communication a top priority of his mandate, racking
up press interviews, as well as meetings with
important stakeholders, regulators and ministers.
The ABBL thus noticeably stepped up its communication
activities and media presence in 2010.
In addition, the ABBL increasingly coordinated
its communication efforts with Luxembourg for
Finance, European Banking Federation and ALFI.
The newly elected Chairman was highly solicited
by the press, and, in joint coordination with the
ABBL’s CEO and communication team, commented
on a number of national and international
issues.
2010 was indeed a year rich in events and communication
issues: tripartite negotiations, austerity
measures, sovereign debt crisis, Basel III, banking
and financial transaction taxes, employment in the
banking sector, etc.
As the voice of Luxembourg’s banking sector,
the ABBL was naturally a preferred source of information
and statements for the press on these
and other issues.
The crisis is felt in Luxembourg
If 2008 was the year of financial shock, 2009 the
year of crisis, then 2010 was the year of recovery
and of austerity measures. The latter, in particular,
highlighted disagreements and caused a certain
degree of tension between the social partners in
Luxembourg. The failure of the tripartite negotiations
was the result of diverging views on the
economic state of the country and the measures
that are necessary to put Luxembourg back on
the road of sustainable recovery.
Defending the interests of employers in the financial
sector, the ABBL regularly communicated on
these and other related issues in the press. In his
role as Vice-Chairman of the employers’ association
UEL and representing financial sector employers,
ABBL Chairman Ernst Wilhelm Contzen
thus had to give a great deal of interviews and
statements to the national press on the matter.
19 July 2010
Mc Kinsey European Private Banking Study 2010:
Luxembourg experienced significant outflows of 5%
in 2009 because of its focus on Western European
money. Despite this, private banks in Luxembourg
continue to be Europe’s champion in terms of
profitability with a profit margin more than twice
the European average.
34

The ABBL was also exposed to criticism from
trade unions in the context of the collective bargaining
agreement. Refusing to acknowledge
economic reality, trade unions kept insisting on
a yearly wage increase of 2.8%. This was something
the ABBL could not accept.
Both in calling for austerity and keeping labour
costs in check and in wishing to negotiate a
zero round collective bargaining agreement,
the ABBL was criticised for being spoilsports
of the apparent economic recovery. In a general
climate of bank-bashing and calls for punitive
bank taxes, the ABBL had the difficult task of
being the bearer of sobering and uncomfortable
news: after 2 years of recession, the current
economic recovery cannot hide the fact that
the country has yet to face up to its structural
problems and that the high growth rates we’ve
seen for the last two decades may very well
be a thing of the past. In the banking sector in
particular, a gap is gradually widening between
shrinking profits and rising costs.
Evolution of the ABBL web presence
After having launched its new website in 2009,
the ABBL communication department finetuned
the association’s web presence in 2010.
The use of technical dossiers with interlinked
news items has been further developed, while
a “Banking in Luxembourg” section was established
with increased focus on client information.
ABBL members were also given more prominence.
Consistent with the existing member
news category, a new functionality was introduced
allowing member news items and events
to be featured on a member’s individual page
on www.abbl.lu.
In order to allow interested parties to find the
information they seek more easily, the ABBL
also launched a landing page as an alternative
gateway to the association’s website:
www.luxembourg-banking.lu.
22 July 2010
OECD approves the 2010 updates
of its Model Tax Convention.
21 July 2010
G20 leaders fail to reach an agreement
on implementing a global banking levy.
35

ABBL events in 2010
Like every year, the ABBL organised a number
of “ABBL meets members” information sessions,
briefing its members on current issues and on
the outcomes of the work of ABBL working
groups and technical committees. This year,
the ABBL also hosted meetigns of the European
Banking Federation’s Anti-Fraud & Anti-Money
Laundering Committee and the Physical
Working Group.
Finally, the ABBL organised three press
conferences in 2010.
ABBL events in 2010
08/01/2010
ABBL meets press
04/03/2010
LuxCSD – T2S Experts Meeting
16/03/2010
ABBL-ALFI Reception in Brussels
25/03/2010
ABBL Conference with Patrick Odier,
Chairman of the Swiss Bankers’ Association
(together with the Swiss Chamber of
Commerce for Belgium and the Grand-Duchy
of Luxembourg)
30/04/2010
ABBL General Meeting
30/04/2010
ABBL meets press
06/05/2010
Financial ICT Forum workshop (FIFo)
16/03/2010
25/03/2010 30/04/2010
19/05/2010
36

19/05/2010
ABBL meets members: Circular CSSF 10/437 -
Guidelines concerning the remuneration policies
in the financial sector
10/06/2010 & 11/06/2011
European Banking Federation: Meetings of the
Anti-Fraud & AML Committee and the Physical
Security Working Group
08/07/2010
ABBL meets members: ABBL Communication -
who we are, what we do, what we can do
for you
30/07/2010
ABBL meets press
05/10/2010
ABBL Chairman’s Dinner
20/10/2010
Besteuerung deutscher Grenzgänger -
Neuester Entwicklungsstand
10/06/2010 30/07/2010
05/10/2010 05/10/2010
37

7.
Client protection
The AGDL (Association pour la Garantie des
Dépôts Luxembourg) was established in 1989.
The purpose was to set up a mutual guarantee
scheme covering cash deposits of the customers
of credit institutions. Since the European Directive
1997/9/EC, the AGDL also covers claims arising
from investment transactions in favour of investors
with credit institutions and investment firms.
The ABBL and the AGDL are two separate
and independent organisations. They are linked
through a service level agreement by which the
day-to-day administrative work of the AGDL is
carried out by the ABBL Secretariat.
Failure of Icelandic banks
On 8 and 9 October 2008, the Luxembourg
District Court declared three members of
the AGDL, Glitnir Bank Luxembourg S.A.,
Landsbanki Luxembourg S.A. and Kaupthing
Bank Luxembourg S.A. in suspension of
payments.
Only the guarantee scheme covering the cash
deposits was set in motion, since the investment
instruments were available in the three banks,
allowing the clients to recover their entire portfolios.
The AGDL’s intervention was thus limited
to a maximum amount of 20,000 € per client.
The process of compensation of the clients was
managed by the AGDL on the basis of a longstanding
outsourcing contract with a consultant
firm. Within a few days, the AGDL was thus
able to increase the regular staff of 2 persons
up to 20 persons. The computerised system,
developed in cooperation with this consultant
and tested yearly was entirely efficient and
permitted the simultaneous processing of the
calls for funds from the 244 members of the
AGDL, the administration of the clients’ applications
for compensation, the reconciliation of the
clients’ applications with the figures available in
the books of the banks and the final payment to
the client.
Thanks to this system and the substantial efforts
made by its staff, the AGDL was able to compensate,
from December 2008 and during the whole
year 2009 more than 15.000 customers of the
three banks, most of them being customers of
Kaupthing Bank Luxembourg S.A., and continued
to compensate the clients of Landsbanki
Luxembourg S.A. during the year 2010.
Following a restructuring plan, Glitnir has, since
April 2009, entered a proceeding of voluntary
winding-up. The AGDL recovered its debt and
the Glitnir case has been closed.
Through a restructuring plan approved in
July 2009, Kaupthing, was split in two parts:
1. creation of Pillar Securitisation S.à r.l.,
which took over the debts (among others
AGDL) of Kaupthing and 2. creation of a new
Bank “Banque Havilland S.A.” which took over
23 July 2010
EU banks pass stress tests. The Luxembourg banks
showed good results.
38

the customers of Kaupthing with their deposits,
while the customers of the Belgian branch were
taken over by Keytrade Bank. The recovering
process began in August 2009. In 2010, the
AGDL received the four scheduled instalments.
Landsbanki was declared in liquidation on
8 December 2008. The bankruptcy rules and
proceedings are applicable to this liquidation.
During the year 2010, the AGDL Secretariat
continued to manage, without the assistance of
the consultant, the applications for compensation
introduced by the customers of Landsbanki as
well as payments of the compensation. In 2010,
the Secretariat also represented the AGDL in
the Debtor’s Committee of Landsbanki.
In December 2010, the AGDL organized an
extraordinary general meeting of its members
in order to adapt its statutes to the provisions
of the European Directive 2009/14/EC, not yet
transposed into Luxembourg law, in particular
to accommodate the reduction of the payout
delay to 20 working days.
Developments at the European level
The highlight and the most time consuming
dossier of the year 2010, which will continue to
occupy stakeholders in 2011, was the European
Commission’s publication, in July 2010, of the
drafts for a new Directive on Deposit Guarantee
Schemes (DGSD) and a new Directive on Investor
Compensation Schemes (ICSD).
The key points of the DGSD are:
• Enlargement of the scope of protected depositors
to all non-financial companies, regardless
of their size;
• Deletion of the setting-off of deposits and
liabilities;
• Payout in the currency in which the account
of the client was maintained;
• Maximum harmonisation of the level of coverage
at 100,000 €;
• Reduction of the payout delay to 7 calendar
days;
• Reimbursement without any need of declaration
or request from the client;
• Ex-ante funding;
• Target Fund should be established in a period
of 10 years to reach 1,5% of eligible deposits;
• Borrowing between Deposit Guarantee
Schemes;
• Risk-based contributions;
• Increase of cross-border cooperation.
27 July 2010
The Group of Governors and Heads of Supervision
reach broad agreement on Basel Committee capital
and liquidity reform package, known as Basel III.
28 July 2010
CEBS publishes its implementation guidelines on
large exposures exemptions for money transmission,
correspondent banking, clearing and settlement and
custody services.
39

The key points of the ICSD are:
• Alignment with MiFID;
• Extension of the coverage in case of the failure
of a third party custodian;
• Compensation of a UCITS holder and extension
of the coverage in case of the failure of a UCITS
depositary;
• Exclusion of any claims when the investor is
involved in market abuse;
• Increase of the level of compensation up to
50,000 €;
• Fully ex-ante funding;
• Target Fund should be established in a 10 year
period at a level of 0.5% of the value of the
instruments held by investment firms or UCITS;
The least one can say is that these two projects
were not particularly welcomed by the AGDL as
well as by the other Deposit Guarantee Schemes
in the European community.
During the second semester of 2010, the AGDL
participated in numerous working groups in
Luxembourg (ABBL, ALFI, Ministry of Finance,
CSSF) and in Europe (European Banking
Federation, EFDI, European Commission) in order
to have the text of these drafts changed and
improved. The President and the Secretary of the
AGDL met members of the European Parliament
in order to let them know their concerns.
In light of the publication of these draft directives,
the Luxembourg authorities have postponed the
Luxembourg draft law to set up a “new” AGDL.
• Borrowing between national schemes;
• Payout delays of 3 months from eligibility statement
with possibility of extension and provisional
payment of 1/3 to be paid if payment
cannot be made within the delay;
• Increase of the investor information obligations.
17 August 2010
Luxembourg ranks 5 th of the Newsweek top 100 best countries
around the world based on five categories: Education, Health,
Quality of Life, Economic Dynamism and Political Environment.
The ABBL and Ineum Consulting update their Guide for Payment
Services Providers.
29 July 2010
CESR publishes the first set of technical advice to
the EU Commission in the context of reviewing MiFID.
40

8. Clusters
The Private Banking Group, Luxembourg (PBGL)
was the ABBL’s first business line cluster and
federates Luxembourg private bankers’ interests
within the ABBL’s general policy. The PBGL is
composed of high-profile representatives from
ABBL members active in the field of private
banking. Its missions include the definition and
implementation of strategic measures to the benefit
of Luxembourg private banking and its environment,
a close cooperation with Luxembourg
for Finance, the agency for the development of
the financial centre, with regards to the definition
and execution of financial centre development
efforts, as well as the development of private
banking training measures, certifications and
standards. It counts 57 members, all directly
active in the field of private banking.
The PBGL’s Executive Board acts as a steering
organ for an array of working groups composed
of practicing private banking specialists and executives.
The members of the Executive Board
are senior financial centre figures with direct responsibilities
in leading Luxembourg private banking
operations. Working groups are active in various
fields linked to strategy, training and talent
management, product and service innovation,
business intelligence, international positioning,
public relation and promotion efforts, as well as
industry-related legal and tax expertise.
The Members’ Meeting held in June 2010 validated
the PBGL’s achievements and encouraged the
Executive Board to continue its efforts. Working
groups, which were recomposed in December
Luxembourg market share in International private banking*
6%
Luxembourg
27%
24%
10%
19%
14%
Asia
(Hong Kong & Singapore)
Others
United States & Caribbean
(Florida, New York, Delaware, Caribbean
countries & Panama)
United Kingdom & dependencies
(Isle of Man, Ireland, Jersey, Guernsey)
Switzerland
* International Private Banking centers predominantly serve a non-resident clientele
Sources: Boston Consulting Group 2009, Private Banking Group, Luxembourg 2009.
41

2009 to allow private banks to voice their opinion
on subjects that matter to them, are on good
track and results are beginning to kick in. PBGL
Meets Members sessions and direct communication
to members should, however, increase in
frequency.
Following Charles Hamers’ retirement as CEO
of Credit Agricole Luxembourg in December
2010, Luc Rodesch (Banque de Luxembourg)
was confirmed as Head of the PBGL until the
statutory elections that are to take place in
June 2011. In order to ensure continuity in the
cluster’s governance, Executive Board members
elected Dirk Adriaenssens (ING Luxembourg
S.A.), as well as Patrice Crochet (BGL-BNP
Paribas S.A.) as Vice-Heads of the PBGL.
With the retirement of Charles Hamer an era
comes to an end. Charles Hamer’s expertise,
energy, determination and integrity will nevertheless
remain an asset to the PBGL as he has
accepted to be the honorary Head of the PBGL,
as well as to lead, as of 2011, a newly created,
multi-lateral, reflection forum on strategic
Luxembourg private banking issues, called the
Advisory panel, which shall work on defining,
amongst others, the 2020 strategy.
2010 was a particularly busy year for the PBGL.
Besides closely following and accompanying developments
on the regulatory front, Luxembourg
private bankers took next steps with regards to
strategic priorities identified in the strategic plan
for Luxembourg private banking issued in 2009.
PBGL Members are convinced that a constant
adaptation of available solutions to the needs of
increasingly sophisticated and international clients
is necessary to remain recognized as international
private banking centre of excellence.
The development of the Luxembourg residence
is one of the identified priorities. For this reason,
the “Welcome to Luxembourg” taskforce was
put into place. Throughout 2010, the working
group initiated a constructive dialogue with
various Luxembourg authorities and institutions
(Ministry of Economy and Foreign Trade,
Ministry of Finance, Ministry of Tourism, City
of Luxembourg, Luxembourg for Finance,
Luxembourg for Business, Limsa, etc.) and
conducted sounding interviews with international
law practices, entrepreneurs and private individuals
that relocated to Luxembourg. A guide
with the working group’s recommendations
entitled “Welcome to Luxembourg – A Land of
International Opportunity” may be downloaded
on the ABBL website.
7 September 2010
New framework for supervision in Europe: creation of a
European Systemic Risk Board (ESRB), and 3 supervisory
authorities: a European Banking Authority (EBA); a European
Insurance and Occupational Pensions Authority (EIOPA) and
a European Securities and Markets Authority (ESMA).
19 August 2010
OECD progress report on the implementation of the
internationally agreed tax standard. Progress is very slow.
42

Redesigning strategy and preparing the future is
naturally a collaborative effort that needs to be
conducted on financial centre level. This is why
the PBGL is represented at the “Haut Comité de
la Place Financière” (HCPF), a taskforce that is
directly led by Minister Luc Frieden, and composed
of high-level industry representatives. As
such, the PBGL contributes to accelerating the
necessary transformation of the profession by
ensuring that the conductivity of the local business
environment remains in synch with client
needs. The development of new legal measures,
instruments and in-house competencies with
regards to the management of global mobility,
support to the development ambitions of internationally
operating entrepreneurs as well as
wealth management in recomposed families
are elements to be stressed in this context.
As the best strategy cannot work without making
oneself heard and understood, Luxembourg private
bankers invested, along with the ABBL and
Luxembourg for Finance (LFF) in public relation
efforts. In this context, major milestones were
the media training of a number of senior financial
centre figures, the definition of media monitoring
and coordination processes, the activation of
a PR Steering Committee, the inception of the
redesigning processes of private banking promotion
efforts conducted in close coordination with
LFF, as well as the launch of a conference cycle
on Luxembourg private banking in partnership
with “Savoirs Partagés”, a networking association
bringing together students, as well as junior
and senior financial centre professionals.
WEALTH BANDS IN TERMS OF ASSETS
AuM
Revenues
EUR 300 bln
EUR 3.4 bln*
9%
100,000 - 250,000 €
Contribution to tax revenues
EUR 424 mln*
9%
250,001 - 500,000 €
Direct 7,236 *
42%
9%
500,001 - 1,000,000 €
FTEs
Direct & indirect 10,369 *
19%
1,000,001 - 5,000,000 €
5,000,001 - 15,000,000 €
Client facing staff 1,500 **
12%
> 15,000,000 €
Sources: PBGL calculations based
on CSSF data end 2009; except:
* Codeplafi 2009, ** PwC 2009
43

Getting a grip on Luxembourg private banking
business intelligence continued to be a
major building ground in 2010. In this context,
the Statistics working group repeated
its yearly data collection exercise in cooperation
with the “Commission de Surveillance du
Secteur Financier” (CSSF) and PBGL member
banks. This yearly exercise is conducted in
order to obtain reliable statistics on the weight
of the Luxembourg private banking industry.
Furthermore, three editions of the Luxembourg
Private Banking Cockpit were published in 2010.
The Luxembourg Private Banking Cockpit is an
inventory of statistics on Luxembourg private
banking, international rankings, as well as industry
trends identified by local and international
consultancy firms. The document is available for
download on the ABBL website. Cooperation
with the Luxembourg School of Finance (LSF)
was finally put on good track and should bear
its first fruits in 2011.
Promotion efforts were another major focus in
2010. The PBGL’s Promotion working group, for
instance, assisted Luxembourg for Finance with
the definition and execution of private banking
promotion efforts. Luxembourg private banks
participated in numerous economic missions
or events organized by LFF, and senior financial
centre figures continuously participated in panels
on Luxembourg wealth management organized
in this context.
The Wealth Planning working group dealt – in
coordination with the Fiscal Affairs Committee of
the ABBL – with national and international legal
issues, mainly in connection with G20, OECD
and ECOFIN decisions and initiatives. Intense
lobbying activities in the form of advocacy, meetings
and presentations on national and international
level, as well as input to ABBL opinion
papers should be mentioned in this context.
GEOGRAPHIC ORIGIN LUXEMBOURG PRIVATE BANKING CLIENT ASSETS
17%
18%
Luxembourg
Belgium, France
& Germany
19%
Other European
countries
46%
Other countries
(non European)
8 September 2010
Luxembourg and Portugal sign a protocol amending
the existing double taxation agreement.
9 September 2010
Luxembourg slightly increases its position from 19 to 20 in terms
of global competitiveness in the World Economic Forum ranking.
44

In the area of training, the PBGL continued
to invest itself in its privileged relationship with
IFBL - The Institute. In this context, the PBGL
sponsored the development of an array of private
banking related trainings and certifications.
Thus, tax planning modules focusing on Belgium
and France are now available. After the successful
launch of a private banking certification
in 2008, an additional high-level certification, the
Certified International Wealth Manager (CIWM),
was launched in October 2009 in cooperation
with the ABBL and the Institute. The CIWM
is an internationally recognized certification
also offered by the Swiss Wealth Management
Institute and a first wave of private bankers has
been certified. In the course of 2010, the working
group on training reflected on qualification
standards for Luxembourg private bankers and
a profiling tool. In the short term, cooperation
will base itself mainly on certifying anti-money
laundering standards, whereas cooperation with
the Luxembourg School of Finance (LSF) in view
of the creation of an internationally recognized
master’s degree in wealth management is on
good track. A program shall be jointly developed
in 2011.
13 September 2010
The Basel Committee on Banking Supervision
announces a substantial strengthening of
existing capital requirements.
23 September 2010
The IFBL together with the ABBL’s Retail Banking
Group launches Certified Retail Banker.
45

The Retail Banking Group (RBG), which brings
together the ABBL member banks active in retail
banking, followed closely the various initiatives
taken by the European Commission (EC) to create
a single market for retail financial services guaranteeing
competitiveness and consumer protection.
The RBG participated in the consultations of the
EC on responsible lending and borrowing and
basic bank accounts.
At national level, the RBG focused its work on
the collection of data. The RBG thus launched
a database containing key data on the national
retail market.
This data is collected in order to obtain reliable
statistics on the economic weight of the retail
banking sector and to determine the individual
market shares of the different actors. It will be a
useful tool to strengthen promotion and lobbying
efforts.
Training
One of the objectives of the RBG is the promotion
of training programmes adapted to the retail
banking sector.
In September 2010, IFBL - The Institute launched
a certified training programme for the retail banking
profession, in collaboration with the RBG.
The new IFBL certification provides a coherent
and unified training framework in retail banking for
the Luxembourg financial centre. Participants are
familiarised with professional obligations as well
as the legal, fiscal and economic environment and
learn to manage and meet the needs of clients.
Currently, the training programme is divided into
two branches: Retail Client Adviser and SME
Adviser. Participants that have completed the two
branches, as well as a module on the tax environment
of neighbouring countries, will be entitled
to “Senior Retail Banker”, a new quality label for
banking in the Luxembourg financial centre.
29 September 2010
After the failed tripartite, the government
and the trade unions (OGBL, LCGB and
CGFP) come to a bipartite agreement.
46

Bank account switching
In 2009, the cluster elaborated a guide on bank
account switching that describes the services offered
free of charge to the customer when changing
his or her bank account. The guide transposes
the principles elaborated by the European banking
sector as required by the European Commission.
The European Commission committed the
Member States to ensure appropriate monitoring
of these principles.
In 2010, one year after the introduction of the
guide on bank account switching, the RBG, in
collaboration with the Commission de Surveillance
du Secteur Financier (CSSF) and the Luxembourg
Consumer Association (ULC), undertook a review
process in order to evaluate the compliance of
banks with the principles laid down in the guide.
The results of the evaluation process were made
available to the European Commission.
4 October 2010
The ABBL organises a first workshop on Mobile
Payments, gathering representatives of the
banking community, experts from local mobile
network operators, mobile payments solution
providers ,as well as representatives from the
City of Luxembourg.
9 October 2010
The IMF announces it will step up its
focus on global systemic stability.
47

9.
Luxembourg for Finance
Luxembourg for Finance (LFF) is the agency
for the development of the financial centre. In
this role, LFF supports the Luxembourg financial
services industry by creating a strong brand
image for the financial centre, engaging in bilateral
discussions with third party countries and
encouraging new business in Luxembourg.
2010 was a year of recovery and evolution in the
financial centre. Assets under management in
investment funds rose to new all time records,
while the private banking industry was publicly
engaged in redefining its role as the provider of
sophisticated wealth management services to
clients with a multinational profile. LFF supported
this evolution by promoting the international image
of the financial centre and providing a port of call
for actors contemplating projects in Luxembourg.
During the year LFF held financial seminars in
16 cities around the world, reaching over 2,240
participants. Many of these missions were
enhanced by the presence of the Minister of
Finance, Luc Frieden or the Minister of the
Economy and Foreign Trade, Jeannot Krecké,
who were able to strengthen bilateral relationships
with the country concerned.
LFF represented the financial centre at nine trade
fairs during the year, including the Asian Financial
Forum in Hong Kong, GAIM in Monaco, MIPIM in
Cannes, the World Islamic Banking Conference
in Bahrain and the Captive Live Europe fair in
Luxembourg.
Closer to home, the communications team was
active throughout the year, writing 118 articles for
the website and engaging in conversation through
social media such as Facebook, LinkedIn, Viadeo
and Xing. Joint projects with media partners
26 October 2010
AIFM: The EU Parliament and the Council of Ministers
reach an agreement which will introduce European
regulation for the managers of alternative investment
funds, including hedge funds and private equity.
The EU Commission sets out its plan for a framework
for crisis management in the financial sector. No entity
should be “too big too fail”.
27 October 2010
Luxembourg ranks 11 th in Transparency International’s
2010 global Corruption Perceptions Index (CPI),
a measure of domestic, public sector corruption.
48

to enhance the brand image of Luxembourg
proved a success: a round table was held with
Börsenzeitung in Frankfurt, while a special dossier
with Milano Finanza was published to coincide
with a financial mission to Milan. This tactic
will be repeated in 2011 in other markets.
The LFF Newsletter was redesigned to appeal
to its key readership: financial professionals who
have attended our foreign promotional events.
16 technical and marketing brochures were also
produced or updated during the year on behalf
of different business lines or in support of foreign
missions.
As a development agency, LFF is at the forefront
of the drive to bring new business to Luxembourg
and support developing sectors. LFF senior
management took part in 133 business development
meetings, while private presentations of the
financial centre were made to 24 financial and
academic institutions and to a number of foreign
delegations visiting the country.
During 2010 Luxembourg enhanced its reputation
as a leading centre for Islamic finance. The
Luxembourg Central Bank (BCL) became the first
European central bank to be a member of the
Islamic Financial Services Board, where it is an active
member of the liquidity management working
group. LFF had a promotional stand at two major
international Islamic finance conferences and organised
or took part in several domestic seminars
in this area. Luxembourg speakers represented
the financial centre at a number of Islamic finance
events around the world and Luxembourg was
regularly featured in the Islamic finance press. The
launch of a dedicated section on the LFF website
was widely reported in the Islamic finance press.
The Luxembourg Financial Forum, organised by
LFF for the third year, has succeeded in establishing
itself as a major annual event: 586 senior
international delegates attended at the invitation
of Prime Minister Jean-Claude Juncker.
4 November 2010
The UN Development Index Report, snapshot of
living standards, ranks Luxembourg 15 th .
49

10. Training
In a difficult global economic environment, draconian
cuts in the training budgets of the financial
institutions might have been expected with serious,
or even dangerous, consequences for the
IFBL. In fact the Institute not only succeeded in
maintaining its position, but even strengthened
its role with the stakeholders in our financial
centre. This was due to several factors which
are explained in more detail below.
The IFBL and its “core business”:
training
Drawing on a large reservoir of some 250 expert
trainers grouped into quality circles and surrounded
by the representative professional associations
of the financial centre, the Institute constantly
updates its existing offer by innovating and, as
far as possible, anticipating future needs.
In the course of the year, the Institute invested
great efforts in the development of the trainings
which underpin the pillars or core business activities
of the centre:
Investment funds
In the last two years we have noted some decline
in interest in our “basic” courses. This is due
largely to the fact that the need for “operational
workers” is no longer so pressing and may even
decline further in future. Working in cooperation
with the fund industry association ALFI, the
Institute has taken account of this change and,
during the year, introduced a series of courses
in the fields of “Real Estate”, “Private Equity”
and “Hedge Funds”. These courses, generally at
a higher level, are given in English. Strategically,
this has enabled us to reach a more specialized
and better informed audience and also to make
contact with new categories of clients who had
not previously worked with the Institute.
Private Banking
Following the example of the financial centre
in general, the face of private banking is set to
change in the future. In cooperation with the
“Private Banking Group, Luxembourg”, a cluster
of the ABBL, the IFBL has set itself the goal
of putting in place a structured and coherent
framework for training in private banking. Taking
account of the needs of the main players in our
financial centre, the Institute has not only developed
a range of training courses for participants at
every level from PB assistant to the highest wealth
management profiles, but has also drawn up an
effective specification of skill sets enabling HR
managers to assess and advance the knowledge
and skills of their staff in a structured and highly
professional framework. Here too the Institute
sees its role as the provision of proactive support
for what is one of the strategic core professional
activities for the future of our financial centre.
18 November 2010
ECOFIN gives its green light to the EU
framework for financial supervision.
50

Retail Banker
The training course newly introduced in 2010 for
retail bankers in Luxembourg follows exactly the
same logic. Designed in close cooperation with
the ABBL’s Retail Banking Group, this training is
designed to impart robust knowledge and skills in
retail banking and also to create a genuine quality
label for retail banking professionals. Strategically,
the ultimate objective is to help, through this professionalisation
of the retail banking activity,
to strengthen and even enhance the reputation
of our financial centre.
The social dimension: the IFBL as
a partner of the Luxembourg State
At the request of the Luxembourg Ministry
of Labour, the IFBL has adopted a resolute
commitment in 2010 to fields which extend
well beyond the framework of training as such.
The Institute was, for example, involved in the
Fit4Job project whose aim was to evaluate,
accompany and train persons who have lost
their jobs in the financial sector. Thanks to this
project, the Institute was able to broaden its
field of action and is now in a position to offer a
dependable, efficient and professional platform
for the financial centre to permit exchanges between
jobseekers and employers in the financial
sector. Applications addressed to the Institute
by the public authorities and by individual establishments
in our centre prove that the path that
we have decided to follow is the right one and
meets a real need.
New focus on external visibility
To mark the broadening of its activities, the
Institute decided to update its own name (with
the transition from “Luxembourg Institute for
Training in Banking” to the more universal
and less restrictive term “The Institute”) and
visual identity on the occasion of its twentieth
anniversary.
The Institute’s catalogue has been restructured
to make it easier for readers to follow. In the
same spirit, the website is undergoing a complete
review and will be put online in early 2011.
Last but not least, in the wings ....
Probably less perceptible to the outside world,
the last big project of the year had far-reaching
repercussions for the internal workings of the
Institute. With a view to optimizing the internal
resources, improving the administrative management
and, by doing so, giving its clients the
benefit of higher quality, the Institute has in the
past two years installed a high performance
management tool which is in the vanguard of
technical progress. This transition took place
smoothly and will gradually reveal the Institute as
a modern, active and progressive entity which is
willing to provide all the support that the financial
centre may need.
10 December 2010
Luxembourg budget 2011 aims to eliminate state deficit
by 2014. The draft proposes tax savings and spending
cuts worth 450 million Euros.
The European Banking Federation appoints the
ABBL’s Marc Hemmerling as new Payments Systems
Committee Chairman.
6 December 2010
Luxembourg clarifies its tax regime for UCITS IV
after complaints that the directive caused confusion
over European fund taxation.
51

Structure of the Institute
Board of Directors
Fouad Edmond RATHLE (Chairman),
Garanti Bank Luxembourg Branch
Giovanni GIALLOMBARDO
(1 st Vice-Chairman), UniCredit Luxembourg S.A.
Michel COPPA (2 nd Vice-Chairman),
Société Générale Bank & Trust
Serge DE CILLIA (Managing Director),
ABBL
Massimo AMATO,
UBI Banca International S.A.
Pierre BACK,
Banque Raiffeisen
Christophe BODELET,
ING Luxembourg S.A.
Pierre-André DELEBECQUE,
BGL BNP Paribas S.A.
Roland FÜRPASS,
Banque et Caisse d’Epargne de l’Etat,
Luxembourg
Gerd MAUREN,
Nomura Bank (Luxembourg) S.A.
Carlo MOUSCHANG,
Bourse de Luxembourg
Andreas NEUGEBAUER,
DZ PRIVATBANK S.A.
Per Olov OERLING,
Skandinaviska Enskilda Banken S.A.
Alain PICHERIT,
J.P. Morgan Bank Luxembourg S.A.
Etienne PLANCHARD,
Banque de Luxembourg
Karin SCHOLTES,
Pictet & Cie (Europe) S.A.
Bernard SIMONET,
KBL European Private Bankers S.A.
Christian STRASSER,
Dexia Banque Internationale à Luxembourg
Markus THESEN,
Nord/LB Covered Finance Bank S.A.
15 December 2010
Standard & Poor’s Ratings Services affirms its ‘AAA’
long-term and ‘A-1+’ short-term sovereign credit
ratings for the Grand Duchy of Luxembourg.
The government and the employers’ union UEL come
to a bipartite agreement.
16 December 2010
EU leaders agree to set up a permanent crisis fund to bail out
any of the 16 member-nations of the euro zone facing sovereign
debt problems. The proposed fund will replace the EFSF.
Luxembourg transposes UCITS IV into national law.
52

Management
Fouad E. RATHLE (Chairman)
Administration
Christiane HEILMANN, Executive Secretary
Serge de Cillia (Managing Director)
Werner Eckes (General Manager)
Customer Service
Caroline DRESSE
Business Development
Robert BAST,
Client Advisor, Project Manager
Ben LYON,
Client Advisor, Project Manager
Ginette NIERENHAUSEN,
Programme Manager, Project Manager
Marie-Laure FERSTER
Sandra GENET
Florence MASSON
Alma SKENDEROVIC
Fabienne STANCATO
Tania WEBER
Danièle SCHROEDER,
Communication and Marketing
France VERDURE,
Client Advisor, Project Manager
31 December 2010
The Luxembourg tax authority issues a
Circular implementing a new favourable
tax regime for expatriates.
20 December 2010
25 th anniversary of UCITS Directive. The first
directive dates from 20 December 1985.
53

54
12. Appendices

Membership of the Board of Directors (as at 31 December 2010)
Full members
Chairman
Vice-Chairman
Ernst Wilhelm CONTZEN Deutsche Bank Carlo THILL BGL BNP Paribas
Elected members
Pierre AHLBORN
Michel BIREL
Janine BIVER
Georges BOCK
Angelo BRIZI
Jean-Marc FANDEL
Rafik FISCHER
Frédéric GENET
Hans-Ulrich HÜGLI
Michel MAQUIL
Eric MARTIN
Koichi MATSUMOTO
David MICALLEF
Bernard MOMMENS
Jhon MORTENSEN
Andreas NEUGEBAUER
Fouad E. RATHLE
Jean-Luc SPETZ
Rik VANDENBERGHE
Frank WAGENER
Banque de Luxembourg
Banque et Caisse d’Epargne de l’Etat
Linklaters LLP
KPMG
UniCredit Luxembourg
CETREL
KBL European Private Bankers
Société Générale Bank & Trust
Credit Suisse
Bourse de Luxembourg
BGL BNP Paribas
Nomura Bank
The Bank of New York Mellon
Dexia Banque Internationale à Luxembourg
Nordea Bank
DZ PRIVATBANK
Garanti Bank
EUROHYPO Europäische Hypothekenbank
ING Luxembourg
Dexia Banque Internationale à Luxembourg
Co-opted members
On behalf of the ABBL/ALFI Depositary Bank Forum
Geoffrey COOK
Brown Brothers
Harriman
On behalf of the ABBL Retail Banking Group
Benoît HOLZEM Dexia Banque
Internationale
à Luxembourg
On behalf of the ABBL Private Banking Group
Luc RODESCH Banque de Luxembourg
IFBL representative
Fouad E. RATHLE Garanti Bank
55

ABBL Organisation (as at 31 December 2010)
BOARD OF DIRECTORS
Chairman
Vice-chairman
Ernst Wilhelm Contzen
Carlo Thill
MANAGEMENT BOARD
Fernand Grulms
Jean-Jacques Rommes
Serge de Cillia
Rüdiger Jung
Daniel Lehmeier
seconded to LFF
CEO
Head of the Management
Board
Member of
the Management Board
Member of
the Management Board
Member of
the Management Board
Giovanna Bassani
seconded to LFF
Corporate Secretariat
Communications
Corporate Administration
Brigitte Etgen
Head of
Communications
Philipp von Restorff
Editorial support,
Secretariat of
the Board of Directors
Betty Pauly
Editor, Press Relations,
Secretariat of the Board
of Directors
Tom Théobald
Information
Management
Jessica Thyrion
Events, Travel,
Office Support
Carole Eck
Corporate Design,
Publications
Stéphanie Haan
Employers’ Representation,
Social Affairs and Human
Resources
Labour Law
Danielle Haustgen
Social Security
Fabienne Lang
Collective Agreement
HR Management
Myriam Sibenaler
Human Resources
Carole Bertemes
Banking and Finance
Depositary Bank Forum
European Affairs
Head of Organisation,
Technology, Payment
Systems
Marc Hemmerling
Organisation,
Technology, Standards
Jean-Pierre Borsa
Banking Supervision,
Risk Management,
Accounting & Reporting
Gilles Pierre
Financial Markets
Regulation, Securities,
Depositary Bank Forum
Benoît Sauvage
Head of European Affairs
Antoine Kremer
Legal and Tax
Private Banking Group
Retail Banking Group
Coordinator Legal Affairs
Catherine Bourin
European Legal Matters,
Corporate Governance,
AGDL
Patrick Gouden
Coordinator PBGL
Tom Rasqué
Retail, Physical Security,
VAT
Simone Kayser
Support Services
Head of IT
Olivier Pemmers
IT Assistant
Laurent Petrini
Accounting
Doris Cavallaro
Insourced Support
Nathalie Bertemes
HR Payroll
Chantal Petesch
Executive Secretary
Office Management
Diane Meunier
Assistants
Antonella Bocci
Sabine Nickels
Nadja Pfleger
Sophie Poekes
Reception
Chantal Hoffmann
Colette Kremer
Technical Assistants
Piero Ruscitti
Jean Schmitz
56

List of Members and Related Members
Association des Banques et Banquiers, Luxembourg
The Luxembourg Bankers’ Association
Luxemburger Bankenvereinigung

Section 1: all-purpose banks
ABN AMRO Bank (Luxembourg) S.A.
ABN AMRO Life S.A.
Advanzia Bank S.A.
Andbanc Luxembourg S.A.
Argentabank Luxembourg S.A.
Banca popolare dell'Emilia Romagna (Europe) International S.A.
Banco Bradesco Europa S.A.
Banco Itaú Europa Luxembourg S.A.
Banco Popolare Luxembourg S.A.
Bank Leumi (Luxembourg) S.A.
Bank of China (Luxembourg) S.A.
Banque BCP S.A.
Banque BPP S.A.
Banque Carnegie Luxembourg S.A.
Carnegie Fund Management Company S.A.
Banque de Commerce et de Placements S.A.,
Luxembourg Branch
Banque de Luxembourg
Banque de Luxembourg Fund Research
& Asset Management S.A.
Compagnie Financière de Gestion Luxembourg S.A.
Conventum Asset Management
Banque Degroof Luxembourg S.A.
Degroof Gestion Institutionnelle Luxembourg S.A.
D.S. Lux S.A.
Banque Delen Luxembourg
Banque Hapoalim (Luxembourg) S.A.
Banque Havilland S.A.
Kaupthing Life & Pension, Luxembourg S.A.
Banque Invik S.A.
Banque LBLux S.A.
Banque Privée Edmond de Rothschild Europe
Banque Raiffeisen
Banque Safra-Luxembourg S.A.
Banque Transatlantique Luxembourg S.A.
BGL BNP Paribas S.A.
Alleray S.à r.l.
Argance S.à r.l.
BNP Paribas, Luxembourg Branch
BNP Paribas Investment Partners Luxembourg
BNP Paribas Lease Group Luxembourg S.A.
BNP Paribas Securities Services, Luxembourg Branch
Cofhylux S.A.
Dalgarno S.A.
Delvino S.A.
Eris Investissements S.à r.l.
Fidupar S.A.
Fortis L Capital S.A.
Fortis Lease Group S.A.
Pattison S.à r.l.
Quainton Funding S.à r.l.
Tabor Funding S.à r.l.
BHF-BANK International S.A.
Brown Brothers Harriman (Luxembourg) S.C.A.
BSI Luxembourg S.A.
CACEIS Bank Luxembourg
Amundi Luxembourg S.A.
Fastnet Luxembourg S.A.
Fund Channel S.A.
Luxcellence Management Company S.A.
Caixa Geral de Depósitos, Succursale de Luxembourg
Citco Bank Nederland N.V., Luxembourg Branch
Citibank International plc, Luxembourg Branch
Clearstream Banking
Clearstream International S.A.
Clearstream Services S.A.
Commerzbank International S.A.
Compagnie de Banque Privée
Cornèr Banque (Luxembourg) S.A.
Credem International (Lux) S.A.
Crédit Agricole Luxembourg Private Bank
Crédit Agricole Family Office Iberia S.A.
Crédit Agricole Luxembourg Conseil S.A.
S.G.A. Services S.A.
Credit Suisse (Luxembourg) S.A.
Danske Bank International S.A.
DekaBank Deutsche Girozentrale Luxembourg S.A.
Dealis Fund Operations S.A.
DekaBank Deutsche Girozentrale, Luxembourg Branch
Deka International S.A.
Deutsche Bank Luxembourg S.A.
Deutsche Postbank International S.A.
Deutsche Postbank Finance Center Objekt GmbH
Deutsche Postbank Vermögens-Management S.A.
Dexia Banque Internationale à Luxembourg S.A.
Associated Dexia Technology Services
BIL-Lease S.A.
Dexia Asset Management Luxembourg S.A.
Dexia LdG Banque S.A.
Experta Corporate and Trust Services S.A.
RBC Dexia Investor Services Bank S.A.
DnB NOR Luxembourg S.A.
DZ PRIVATBANK S.A.
DZ PB S.A.

East-West United Bank S.A.
EFG Bank (Luxembourg) S.A.
EFG Asset Management S.A.
EFG Asset Management Holding Company S.A.
EFG Investment (Luxembourg) S.A.
EFG Multi Manager Fund Management Company S.A.
EFG Thema Advisory S.A.
EFG Universal Advisory S.A.
Eurobank EFG Private Bank Luxembourg S.A.
Fideuram Bank (Luxembourg) S.A.
Frankfurter Volksbank International S.A.
Freie Internationale Sparkasse S.A.
Garanti Bank Luxembourg Branch
Hauck & Aufhäuser Banquiers Luxembourg S.A.
Life Management S.à r.l.
HSBC Private Bank (Luxembourg) S.A.
HSBC Securities Services (Luxembourg) S.A.
HSBC Trinkaus & Burkhardt (International) S.A.
HSBC Trinkaus Investment Managers S.A.
HSH Nordbank Securities S.A.
HSH Nordbank AG, Luxembourg Branch
Industrial and Commercial Bank of China (Europe) S.A.
ING Luxembourg S.A.
ING Car Lease Luxembourg S.A.
ING Investment Management Luxembourg S.A.
ING Lease Luxembourg S.A.
ING Life Luxembourg S.A.
ING Private Capital Management S.A.
Internaxx Bank S.A.
J.P. Morgan Bank Luxembourg S.A.
John Deere Bank S.A.
KBL European Private Bankers S.A.
Banque Puilaetco Dewaay Luxembourg S.A.
Kredietrust Luxembourg S.A.
Landesbank Berlin International S.A.
LBBW Luxemburg S.A.
Lloyds TSB Bank plc, Luxembourg Branch
M.M.Warburg & CO Luxembourg S.A.
Mediobanca International (Luxembourg) S.A.
Mitsubishi UFJ Global Custody S.A.
Mizuho Trust & Banking (Luxembourg) S.A.
Natixis Bank
Nikko Bank (Luxembourg) S.A.
Nomura Bank (Luxembourg) S.A.
Norddeutsche Landesbank Luxembourg S.A.
NORD/LB Covered Finance Bank S.A.
Nordea Bank S.A.
Nordea Investment Funds S.A.
PayPal (Europe) S.à r.l. et Cie, S.C.A.
Pictet & Cie (Europe) S.A.
Pictet Funds (Europe) S.A.
RBS Global Banking (Luxembourg) S.A.
Sal. Oppenheim jr. & Cie. Luxembourg S.A.
Oppenheim Asset Management Services S.à r.l.
Sal. Oppenheim jr. & Cie. AG & Co. KGaA,
Zweigniederlassung Luxemburg
SGG S.A.
Skandinaviska Enskilda Banken S.A.
LWM S.A.
SEB Asset Management S.A.
SEB Fund Services S.A.
Société Européenne de Banque S.A.
Lux Gest Asset Management S.A.
Société Générale Bank & Trust
Lyxor Asset Management Luxembourg S.A.
Société Générale d’Arbitrages et de Participations S.A.
Société Générale Life Insurance Broker S.A.
Société Générale Private Wealth Management S.A.
Société Générale Securities Services Luxembourg
State Street Bank Luxembourg S.A.
Sumitomo Trust and Banking (Luxembourg) S.A.
Svenska Handelsbanken S.A.
Svenska Handelsbanken AB (Publ), Luxembourg Branch
Swedbank S.A.
The Bank of New York Mellon (Luxembourg) S.A.
UBI Banca International S.A.
UBI Management Company S.A.
UBI Trustee S.A.
UBS (Luxembourg) S.A.
UFG-LFP Private Bank
UniCredit International Bank (Luxembourg) S.A.
UniCredit Luxembourg S.A.
Union Bancaire Privée (Luxembourg) S.A.
Union Bancaire Privée, Succursale de Luxembourg
Van Lanschot Bankiers (Luxembourg) S.A.
VM Bank International S.A.
VP Bank (Luxembourg) S.A.
VPB Finance S.A.
WGZ BANK Luxembourg S.A.

Section 2:
covered bonds issuing banks
Section 6: activities ancillary
to the financial sector
Erste Europäische Pfandbrief- und Kommunalkreditbank AG
in Luxemburg
EUROHYPO Europäische Hypothekenbank S.A.
Hypo Pfandbrief Bank International S.A.
Section 3: public banks
Banque et Caisse d’Epargne de l’Etat, Luxembourg
Section 4: other financial
sector professionals
CEMEX Global Funding S.à r.l.
CEMEX España S.A., Luxembourg Branch
CEMEX Hungary KFT (Luxembourg Branch)
CEMEX Luxembourg Holdings S.à r.l.
CEMEX Premium Finance KFT (Luxembourg Branch)
CETREL S.A.
CETREL Securities S.A.
ICBS S.A.
Lux Global Trust Services S.A.
TATA Consultancy Services Luxembourg S.A.
VP LUX S.à r.l.
Allen & Overy Luxembourg, Cabinet d'avocats
Arendt & Medernach, Avocats à la Cour
Arendt Services S.A.
Atoz S.A.
avantage (Luxembourg) S.à r.l.
BDO Tax & Accounting S.A.
BDO Audit S.A.
CF Fund Services S.A.
CF Services Luxembourg S.A.
Datagest S.à r.l.
Sofinter S.A.
Bonn Schmitt Steichen, Avocats
Castegnaro, Cabinet d'avocats
Deloitte S.A.
Elvinger, Hoss & Prussen, Avocats à la Cour
Ernst & Young
ifb Lux S.A.
KPMG S.à r.l.
Kremer Associés & Clifford Chance, Association d'avocats
Kurt Salmon Luxembourg S.A.
Linklaters LLP
Loyens & Loeff, Avocats à la Cour
NautaDutilh Avocats Luxembourg
Oostvogels Pfister Feyten, Avocats à la Cour
PKF Weber & Bontemps (Abax)
PricewaterhouseCoopers S.à r.l.
Sedlo Jimenez Lunz, Law firm
Section 5: financial professions
Bourse de Luxembourg
Eurizon Capital S.A.
LRI Invest S.A.
Union Investment Luxembourg S.A.
Luxembourg, 31 December 2010

P.O. Box 13 L-2010 Luxembourg | Tel.: (+352) 46 36 60-1 | Fax: (+352) 46 09 21 | mail@abbl.lu | www.abbl.lu