A Typology of Captive Financial Institutions and Money Lenders (sector S127) in Luxembourg

Gabriele Di Filippo and Frédéric Pierret

MPRA Paper from University Library of Munich, Germany

Abstract: The paper presents a typology of captive financial institutions and money lenders (sector S127) in Luxembourg. Given data availability, the analysis relies on a sub-sample of the whole population of S127 firms. This sub-sample features S127 firms whose total assets are at least equal to EUR 500 million. As of Q4 2018, this sub-sample represents about 5% of the total number of S127 firms in Luxembourg, and about 85% of the total assets held by S127 firms in Luxembourg. The period of analysis spans Q4 2014 to Q4 2019. In terms of number and on average over the period Q4 2014 – Q4 2019, the sample of S127 corporations regroups holding corporations (42%), intragroup lending companies (25%), mixed structures (19%), conduits (7%) and loan origination companies (4%). These corporations represent about 98% of the total number of S127 companies whose total assets of at least EUR 500 million. The remaining types that complete the sample of S127 entities consist of captive factoring and invoicing corporations, companies with predominant non-financial assets, extra-group loan origination firms, wealth-holding entities and captive financial leasing corporations. In addition, on average over the period Q4 2014 – Q4 2019, holding corporations own the largest share of total assets (55%) followed by intragroup lending companies (22%), mixed structures (14%), conduits (6%) and loan origination companies (2%). These corporations account for about 99% of the total assets held by S127 companies whose total assets are at least equal to EUR 500 million. The relative importance of holding corporations, intragroup lending companies, mixed structures, conduits and loan origination companies suggests that Luxembourg plays the role of a global financial centre for MNEs. The latter benefit from Luxembourg as a financial platform to manage their business activities and structure their corporate investments.

Keywords: Captive financial institutions and money lenders; Sector S127; Typology (search for similar items in EconPapers)
JEL-codes: C80 C81 L22 (search for similar items in EconPapers)
Date: 2020-07, Revised 2020-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in BCL Working Paper 146 (2020): pp. 1-62

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Related works:
Chapter: A typology of captive financial institutions and money lenders (sector S127) in Luxembourg (2021)
Working Paper: A Typology of Captive Financial Institutions and Money Lenders (sector S127) in Luxembourg (2020)
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