Luxembourg: Financial Sector Assessment Program: Technical Note-Selected Issues in Banking Supervision

IMF Staff Country Reports, August 28, 2017

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Luxembourg: Financial Sector Assessment Program: Technical Note-Selected Issues in Banking Supervision

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Bibliographic details

• Published: August 28, 2017
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781484316801.002

Summary

• This Technical Note examines aspects of the banking supervision regime in Luxembourg.
• Significant progress has been made in relation to the recommendations made in the 2011 Financial Sector Assessment Program.
• Key institutional changes noted:
  • The Finance Ministry is no longer responsible for the granting or revocation of banking licenses.
  • The Commission for the Supervision of the Financial Sector (CSSF) is no longer charged with promoting industry.
  • Resources have increased substantially.
  • There has been a significant increase in the implementation of sanctioning powers.
• Remaining concerns:
  • Potential for government or industry interference in the operational independence of the CSSF.
  • The frequency of on-site inspections of Luxembourg subsidiaries of significant institutions is on the low side.

Key findings and observations

• Progress since the 2011 Financial Sector Assessment Program is characterized by institutional role changes, resource increases, and greater use of sanctioning powers.
• Operational independence risks persist due to potential government or industry interference.
• On-site inspection frequency for Luxembourg subsidiaries of significant institutions is comparatively low.

Subjects and keywords (as listed)

• Subject: Bank supervision, Banking, Basel Core Principles, Financial institutions, Financial regulation and supervision, Financial Sector Assessment Program, Market risk, Mutual funds, Public debt
• Keywords: authorization process, Bank supervision, banking system, banks in Luxembourg, Basel Core Principles, covered bonds bank, CR, credit institution, custodian bank, depositary bank, depository bank, ECB regulation, Global, group exposure, group transaction, investment funds, ISCR, Luxembourg accounting firm, Luxembourg bank, Luxembourg banking sector, Market risk, Mutual funds

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