Hors-série Banque & finance

Why international banking
groups choose Luxembourg
Mr Maas is the Chairman of the Luxembourg Bankers’ Association (ABBL) and a Board
Member of the European Banking Federation (EFB).
As Chair of ABBL, the professional organisation representing the majority of banks and
other financial intermediaries established in Luxembourg, he acts as the voice of the
whole sector on various matters in both national and international organisations.
“
believe,
Contrary to popular
Luxembourg’s
success in private banking
is not built on banking
secrecy, but on the quality
of its services and the
high level of cross-border
expertise on offer
”
Yves Maas
Between 2013 and 2014, 10 new banks
An increasing number of international banks
cross-border investment fund platform, banks in
clients. For instance, Luxembourg is today home
were established in Luxembourg, both from
establish their Luxembourg entity as a
Luxembourg have specialised in global custody,
to the major Chinese banks who have set up
the “Old Continent” as well as from non-EU
wealth management competence centre for
fund administration and offer a full range of
their European headquarters in Luxembourg.
countries. The Grand Duchy today counts
international clients. Luxembourg’s eurozone
fund services from product creation, manage-
Locating in the Grand Duchy enables them to
143 banks from 27 different countries.
location and EU membership offer a high
ment companies services to custody.
leverage the EU passport in order to branch out
degree of complementarity, as well as a
and accompany their corporate clients throu-
While certain doomsayers predicted that the
number of competitive advantages, vis-à-vis
Beyond the universal banking license,
ghout the single European market.
introduction of the automatic exchange of
other major European private banking cen-
Luxembourg regulation also foresees a special
information would spell the end of
tres such as London or Switzerland. And
license for banks issuing covered bonds. The
Many non-EU banks, including Swiss banks,
Luxembourg as a banking centre, reality has
Luxembourg’s AAA status and political, fiscal
Luxembourg covered bond regime offers the
also consolidate their cash pooling and euro
proven them wrong. There are several rea-
and financial stability is not only a key argu-
highest levels of investor protection, a broad
treasury in Luxembourg. They can thus leve-
sons why such a decline did not take place.
ment for banks themselves, but also for their
scope of eligible countries (all OECD countries
rage their Luxembourg entity as an interface
clients and their investors.
are included) as well as the possibility to use
into the European Central Bank system.
First of all, and contrary to popular believe,
movable assets such as ships or planes.
Luxembourg’s success in private banking is
Importantly, however, there is much more to
Finally, banks in Luxembourg have access to
not built on banking secrecy, but on the qua-
Luxembourg as a banking centre than
Luxembourg has become a key location for
the services of a comprehensive financial
lity of its services and the high level of cross-
wealth management, even if the latter
corporate finance services. Many banks in
centre ecosystem that includes essential mar-
border expertise on offer. Moreover, the
remains an important and dynamic pillar of
Luxembourg have specialised in organising and
ket infrastructures, such as the Luxembourg
Luxembourg private banking industry was
activity. Indeed, the diversity of
structuring syndicated loans to finance interna-
Stock Exchange and post-trade service provi-
well prepared for the introduction of auto-
Luxembourg’s banking sector contributes
tional, cross-border projects. Luxembourg’s
ders such as Clearstream, family offices,
matic exchange of information. Over the
significantly to its stability and attractiveness
expertise in the international credit business
insurance companies, lawyers, tax experts,
past 4 years, assets under management have
for international groups.
already dates back to the 1960s, when the
consultants, auditors, accountants as well as
remained stable thanks to the inflow of new
country played a central role in the
a unique regulatory framework that allows
UNHWIS and internationally mobile clients.
The vast majority of banks in Luxembourg
Euromarkets. Moreover, Luxembourg is gene-
banks to outsource IT and operational pro-
Tax transparency has been an opportunity
have a universal banking license. While some
rally regarded as having one of the world’s best
cesses to service providers that are fully
for Luxembourg private banks and wealth
banks have specialised in one particular acti-
laws on financial collateral due to full protec-
regulated by the financial sector supervisor.
managers to expand into new markets and
vity, many make full use of their universal
tion against insolvency risk as well as an effi-
attract new clients, some of whom may have
license to offer a broad range of services to
cient and safe enforcement process.
Whether in private banking, fund services or
previously shied away because of the stigma
private and corporate clients.
corporate finance, Luxembourg is the ideal
of banking secrecy. This new clientele requi-
Non-EU banks, in particular, are using
location for banks to set up a pan-European
res expert wealth and succession planning
More than half of the banks present on the
Luxembourg as their hub to support the Euro
hub to offer financial products and services
services for their businesses and their family,
financial centre play a central role in
liquidity needs of their corporate clients in the
on a cross-border basis.
By Yves Maas
more often than not on a multijurisdictional
Luxembourg’s thriving fund industry. Leveraging
Eurozone. Having such a hub allows banks to
scale. This is what they find in Luxembourg.
on the country’s position as the world’s leading
provide loans in Euro to their corporate banks
Communiqué par Luxembourg for Finance
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LG - Hors-série Banque & finance
LG - Hors-série Banque & finance 39