Luxembourg - the Centre for International RMB Business in the Eurozone
Today, Luxembourg is already the most important hub for cross-border RMB business in the Eurozone. Nicolas Mackel, new CEO of Luxembourg for Finance, talks about the government led initiative to establish Luxembourg as the centre for international renminbi business in the Euro Area.
LFF: How did the RMB initiative between the government and the private sector begin?
NM : The starting point is the internationalisation of the Chinese currency. In my previous job in Shanghai I followed this very closely and together with the Ministry of Finance we saw the opportunities this could bear for Luxembourg’s financial center. A study that PWC prepared already in 2011 helped us frame our initial efforts and laid the ground for the more comprehensive initiative that was launched the following year.
LFF: Which partners are involved?
NM : First of all, some major actors from Luxembourg have been involved in this business from the start, such as the Luxembourg Stock Exchange and Clearstream; also institutional actors such as the regulator CSSF (Commission de Surveillance du Secteur Financier) which is operating at the forefront by granting licences to Chinese banks or asset managers promoting RMB denominated products; furthermore, the three Chinese banks BOC, ICBC and CCB as they operate the European network out of Luxembourg; and finally, last but certainly not least, the fund and banking associations ALFI and ABBL as their members are the primary actors of this initiative.
LFF: What is the objective of this initiative?
NM : The objective is to position Luxembourg as the main RMB business hub in the Eurozone and to create an infrastructure and an environment which are conducive to further developing this position. With the ever increasing role played by China’s economy, positioning Luxembourg as the center for distribution of RMB denominated funds or allowing banks in Luxembourg to offer RMB deposits among their wealth management products is simply a must. Ultimately, being a center for RMB business could also convince Chinese businesses to set up their European operations in Luxembourg.
LFF: What role does LFF play in this context?
NM : Our role is to communicate about Luxembourg’s position as an RMB business center. Luxembourg has been a leading actor in this area from the beginning, but this was not known to the outside world. We will also tie this in with other initiatives and promote it as yet another field of excellence of Luxembourg’s financial center.
LFF: Will the initiative contribute to the diversity of the Luxembourg financial centre?
NM : It will be another pillar in the diversification efforts led by the Ministry of Finances. Together with other initiatives it will help us create new business opportunities for the banks and funds in Luxembourg and thus create jobs which is the ultimate objective of our efforts.