The financial centre gears up
The development of the financial centre is a political priority of the Luxembourg government. Minister of Finance Luc Frieden has briefed the national press on the objectives and measures which will be taken.Internationality, competitiveness, innovation and diversification are the key words for more success. Minster Frieden’s vision of the future relies on 5 pillars.
Wealth management, asset management and investment funds, international loans, insurance and structured finance are the fields in which Luxembourg has made itself a name. But it is not about reinventing the wheel. It is more about strengthening the activities Luxembourg’s financial centre has excelled in in the past. According to Luc Frieden, the five pillars should be reviewed, consolidated and fine-tuned.
Luc Frieden is a man of action. He gives examples on how Luxembourg will become more competitive in a globalised financial world with an increasing number of financial centres fighting for market shares.
In wealth management, up to now half of the customers came from the three neighbouring countries Germany, France and Belgium. Geographically speaking, these will still be important targets, but other markets have to be explored. “New markets and new clients have to be sought in regions like Asia or Latin America”, the minister says before the press.
Fully aware that these customers are wealthier, thus more demanding, new products and a more sophisticated legal framework have to be developed. In this context, Frieden announces that in the months to come Luxembourg will launch a new investment vehicle similar to the English trust or the Dutch stichting.
In the fund industry, Luxembourg is European leader. 80% of all funds distributed cross-border are domiciled in Luxembourg. The government’s aim is to strengthen this position. Luxembourg is already well known for its UCITS funds. Now it is time to also establish the financial centre as a brand name for alternative investment funds.
Another example comes from the insurance industry, where a new status is created. With the PSA (professionnels du secteur d’assurances) Luxembourg hopes to copy the success story of the PSF (professionnels du secteur financier). PSFs are pursuing an activity related to, or complementary to, a financial sector activity.
Not alone in the boat
For Luc Frieden it is clear that there is no alternative to the financial centre. That is why it is important to analyse international trends and to be the first to implement European Directives into national law. In order to be first in class, he is chairman of a newly created think tank called “Haut comité de la place financière”, composed by regulators, professionals of the finance industry and the government.
All the measures and actions presented by Luc Frieden are the result of meetings of this think tank. Two new working groups are being created, one to monitor international regulatory trends and the other to screen what is going on in competing financial centres.
Luc Frieden also announces that Luxembourg for Finance will lead the missions to new markets and its role will be to improve the image of the financial centre abroad. LFF will also fine-tune the messages and develop relationships with international journalists. CW