Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance - PowerPoint PPT Presentation

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Luxembourg, THE international hub for financial services By Fernand Grulms CEO Luxembourg for Finance. Financial services made in Luxembourg. Leading investment fund centre in Europe Leading wealth management centre in the Eurozone. Source: EFAMA, Luxembourg Bankers’ Association. 2.

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Luxembourg, THE international hub for financial services

By Fernand Grulms

CEO

Luxembourg for Finance


Financial services made in luxembourg l.jpg

Financial services made in Luxembourg

Leading investment fund centre in Europe

Leading wealth management centre in the Eurozone

Source: EFAMA, Luxembourg Bankers’ Association

2


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Financial services made in Luxembourg

Law firms

Banks,

Other financial Intermediaries,

Insurance

44,000

Audit,

Tax

Other

27,000

45 % of GDP

(= 16 BIO EUR)

ICT

3


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Luxembourg is one of the mostcompetitive economies in Europe….and in the World !


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International competitiveness indicators


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Luxembourg’s economy

GDP growth Luxembourg versus EU (15)

  • Above all service economy (81% of GDP income)

  • Good quality of life

  • High standard of living


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Luxembourg, a solid base

  • Large number of European institutions

  • Headquarter of Arcelor-Mittal (world largest steel producer)

  • Headquarter of SES (world leader in global satellite communications)

  • RTL Group World Headquarters (Multimedia)

  • Cargolux Headquarters (Best All-Cargo Airline 2008)

  • European Headquarters Amazon, Apple


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Luxembourg, an international platform


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Luxembourg, an international platform


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Luxembourg, an international platform

Direct investment inflows OECD countries (2006)


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Luxembourg, an international platform

Direct investment outflows OECD countries (2006)


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The institutional framework

1) EU legislation (directives)

  • Europeanpassport (Home country control)

    • Banks

    • Insurance & reinsurance

    • Investment service providers

    • Investmentfunds

    • Pension funds

  • Withouteuropeanpassport

    • Cross-border allowed but host country must approve

      (if provided to retailcustomers)

    • Examples

      • Venture capital & privateequity

      • Real estate

      • Securitisation


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    The institutional framework

    2) BIS rules

    3) IOSCO rules

    4) IAIS principles

    5) FATF recommandations

    6) OECD recommandations


    Institutional organisation l.jpg

    Institutional organisation

    Minister for the Treasury

    Luxembourg

    central bank

    Commission for the supervision of the financial sector

    Insurance

    Commission

    Macro supervision

    Systemic risk

    Liquidity

    Payment systems

    Banks

    Financial intermediaries

    Securities markets

    Investment funds

    Pension funds

    Other vehicles

    Life insurance

    P & C insurance

    Reinsurance

    Captives

    Pension funds


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    The financial centre today

    • 154 Banks

    • > 250 other professional intermediaries (asset managers, brokers, transfer agents…)

    • > 3,000 Investment funds

    • 188 asset management companies for collective investments

    • 54 Life insurance companies

    • 37 P&C insurance companies

    • 262 reinsurance captives

    • 1 direct reinsurer (Swiss Re for EU business)


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    Other service providers today

    Professional service providers have great know-how on structuring international financial transactions

    • Business & tax lawyers, notaries

    • Auditors, consultants, accounting firms

    • EDP providers (software & hardware)


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    Origin of banks in Luxembourg


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    Free provision of services in the EU


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    Cross-border finance: insurance

    Total: € 12.44 billions

    LifeLuxembourg4.4%

    Non lifecrossborder6.3%

    Non LifeLuxembourg5.4%

    Life Crossborder83.9%

    Source: Commissariat aux Assurances 2007


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    Life insurance: origin of premiums

    Source: Commissariat aux Assurances 2007


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    Luxembourg a sound financial centreSolvency ratio since 1990


    Luxembourg a sound financial centre l.jpg

    Luxembourg a sound financial centre

    The world’smostsoundbankingsystems:

    (7.0 = healthy, withsound balance sheets)

    • Canada – 6.8

    • Sweden – 6.7

    • Luxembourg – 6.7

    • Australia – 6.7

    • Denmark – 6.7

    « The financial system remains sound, resilient to potential adverse shocks and well supervised »

    Latest IMF report


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    Luxembourg Stock ExchangeStrong listing activity

    3,700 Issuers (100 countries, and 13 supranationals are represented on the exchange)

    Leading position for international bonds

    Quotation lines

    (as at 31 January 2009)

    Bonds32,570

    EUR 19,554

    Others 13,016

    Warrants 7,735

    Shares 289

    Domestic 38

    Foreign 251

    UCIs 8,182

    Domestic 8,015

    Foreign 167

    Total48,776

    Leader for GDRs (Global Depositary Receipts)

    • Leading exchange for listing GDRs in the world

    • In total 222 GDRs listed

    • Primarily issued by companies based in Asia, more particularly from India


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    Luxembourg Stock ExchangeStrong listing activity

    Leading position for international bonds

    Quotation lines

    (as at 31 January 2009)

    Bonds32,570

    EUR 19,554

    Others 13,016

    Warrants 7,735

    Shares 289

    Domestic 38

    Foreign 251

    UCIs 8,182

    Domestic 8,015

    Foreign 167

    Total48,776

    Others

    3%

    Euronext

    5%

    London

    10%

    Bourse de

    Luxembourg

    46%

    Deutsche

    Börse 11%

    Dublin

    25%

    Leader for GDRs (Global Depositary Receipts)

    • In second place behind the NYSE and ahead of London in the quotation of depositary receipts

    • In total 221 GDRs listed as at December 31, 2008

    • Primarily issued by companies based in Asia, more particularly from India


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    Strategic re-positioning

    Year

    2,000


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    Main areas of competence

    • Investment funds

    • Private banking & wealth management

    • Insurance & reinsurance

    • Corporate finance

    • Pension funds

    • Securitisation vehicles

    • Venture capital & private equity vehicles

    • Real estate structures


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    The Luxembourg investment fund sector

    Strong development after UCITS I

    Net assets of Luxembourg domiciled UCIs


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    The Luxembourg investment fund sector

    • … at a glance:

    • > 3 000 investment funds

    • > 11 000 fund units

    • almost 2 000 billion euros of assets under management

    • more than 32 000 distribution agreements for Luxembourg retail funds (“UCITS”)

    Figures as at May 2008 – Source: CSSF


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    The Luxembourg investment fund sector

    Market shares (%) of promoters

    of Luxembourg domiciled funds

    by country of origin

    in terms of assets under management

    Figures as at May 2008 – Source: CSSF


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    European fund industry

    Figures: March 2008

    Source: EFAMA

    • Data as at end February, 2008

    • Data as at end 2007


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    The top 16 countries of distribution outside the European Union


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    The Luxembourg investment fund sector


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    Luxembourg

    12%

    Latin America

    US

    ASIA

    Middle East

    26%

    B, F, D

    46%

    Other EU

    16%

    Largest private banking in the Eurozone

    Private Banking AuM au Luxembourg

    300 BIO EUR


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    Private equity & venture capital (SICAR)

    • Those who have used it:

      • AXA (largest insurance company in the world)

      • Credit Suisse (global infrastructure vehicle)

      • Deutsche Bank (Spanish real estate, Dubai projects)

      • KKR


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    Captive reinsurance

    Insurance premiums

    reinsurance premiums

    Professional reinsurer

    Industrialcompany

    Direct insurer

    reinsurance premiums

    Captive

    Insurance premiums

    (« The excess » )

    participation


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    Country of origin of mother-company

    Source: Commissariat aux Assurances 2007


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    Economic sector of mother company

    Source: Commissariat aux Assurances 2007


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    Origin of premiums 2007Total amount = 3 BIO Euro

    Source: Commissariat aux Assurances 2007


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    Conclusion

    • Luxembourg is international

    • Luxembourg is diversified

    • Luxembourg is well regulated


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    Thank-you

    www.luxembourgforfinance.lu


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