IMF Staff Country Reports

Luxembourg: Financial System Stability Assessment: Update

Publication Date:

June 28, 2011

Electronic Access:

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Summary:

Luxembourg hosts a large international financial center that plays a pivotal role in its economy and in European financial markets. The crisis exposed significant vulnerabilities in Luxembourg’s financial system, owing to large cross-border exposures to foreign parent banks. The authorities proceeded with large public support to systemically important financial institutions under stress and with a fivefold increase in the deposit guarantee. Strengthening home-host supervisory collaboration and cross-border bank resolution frameworks will be of crucial importance for Luxembourg. Financial stability assessment and stress tests are also carried out.

Series:

Country Report No. 2011/148

Subject:

Banking Commercial banks Financial institutions Financial sector policy and analysis Insurance companies Mutual funds Solvency Stress testing