Luxembourg: Financial System Stability Assessment

International Monetary Fund

No 2017/122, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper evaluates the stability of the financial system of Luxembourg. Financial soundness indicators for Luxembourg’s financial system, which plays a key role in the intermediation of financial capital, have remained relatively robust in recent years. Following rising asset prices and inflows, the investment fund industry has enjoyed strong growth in assets under management, while exposure to liquid assets has remained steady. An assessment of the financial system’s ability to withstand severe but plausible shocks suggests a good deal of resilience, albeit with some risks. Insurance stress test results indicate that strong initial levels of capital and low guaranteed product exposure offer insulation against market shocks.

Keywords: ISCR; CR; investment funds; financial system; foreign exchange; liquid asset; money market fund; Luxembourg insurance industry; Luxembourg-domiciled fund; Luxembourg subsidiary; finance minister; investment fund assets; short-term debt; Mutual funds; Stress testing; Insurance companies; Liquidity stress testing; Liquidity requirements; Global (search for similar items in EconPapers)
Pages: 70
Date: 2017-05-15
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Citations: View citations in EconPapers (4)

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