Luxembourg’s high degree of political, legal and tax stability, its modern legal and regulatory framework (which is largely pre-defined by EU directives) and its openness to the world offer an ideal environment for financial institutions to develop made-to-measure products and services for international clients. As a member of the European Union, Luxembourg guarantees the free circulation of people, goods, services and capital, as well as respecting the rules and standards laid down by international institutions. Two regulatory authorities are responsible for financial sector prudential supervision. Luxembourg offers a high (but not absolute) level of confidentiality while at the same time applying very strict rules with regard to the fight against money laundering and terrorist financing. The availability of a full range of highly specialised service providers allows financial institutions to achieve economies of scale by outsourcing non-core activities.