According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Luxembourg is scored 5.0 out of maximum 7.0 and ranked 15th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.9 (30th place).
Chart 1. Financial Market Development in Luxembourg. Source: WEF.
Soundness of banks is scored 6.1 bringing Luxembourg into the 9th place.
Chart 2. Soundness of Banks in Luxembourg. Source: WEF.
Banks in Luxembourg are mainly focused on the following areas:
Currently there are 136 credit institutions operating in Luxembourg.
In 2018 consolidated banking assets in Luxembourg were 851.08 bln EUR. The consolidated banking assets' evolution is shown at Chart 3 below.
Chart 3. Consolidated banking assets in Luxembourg.
Recent structural changes (2013 - 2018) of the banking sector of Luxembourg are summarised in Table 1.
|Number of Opened Banks||7||9||2||3||5||2|
|Number of Closed Banks||1||9||6||6||5||5|
Table 1. Recent structural changes in the banking sector of Luxembourg.
The list of the most recently opened banks in Luxembourg is provided in Table 2.
|UniCredit Bank AG Luxembourg Branch (new)||June 2018|
|BANCO SANTANDER (BRASIL) S.A., LUXEMBOURG BRANCH (new)||March 2018|
|China Everbright Bank Co. Ltd, Luxembourg Branch (new)||August 2017|
|China Everbright Bank (Europe) S.A. (new)||July 2017|
|RiverBank S.A. (new)||April 2017|
|The Royal Bank of Scotland International Limited, Luxembourg Branch (new)||March 2017|
|AS Expobank Luxembourg Branch (closed)||January 2017|
|Bank of Communications Co., Limited Luxembourg Branch (new)||December 2016|
|UBS EUROPE SE, Luxembourg Branch (new)||December 2016|
|Rakuten Europe Bank S.A. (new)||January 2016|
Table 2. The most recently opened banks in Luxembourg.
All the credit institutions operating in Luxembourg can be classified into several categories. Table 3 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||45|
There are 45 branches of foreign banks from 14 different countries in Luxembourg. Table 4 shows 10 countries having the biggest number of branches in Luxembourg.
|Country of Origin||Number of Branches|
Deposit guarantee scheme is a financial stability mechanism implemented in many countries to protect bank depositors against the loss of their deposits in the case when a bank is unable to meet its obligations to depositors by compensating certain deposits held by depositors of the bank. This compensation is paid out from the contributions which banks have made into a deposit guarantee fund.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Luxembourg are summarised in Table 5.
Table 5. Deposit guarantee scheme in Luxembourg.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Euro) deposit ceiling for Luxembourg is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Chart 4. Deposit Rates in Luxembourg. Source: ECB.