IMF: Luxembourg Financial Sector Assessment Program 2017

The International Monetary Fund conducted a review of Luxembourg financial sector and published its recommendations in 5 technical notes on 28 August 2017. Next to the recommendations to the Luxembourg regulatory authorities, the papers also give an excellent description of the underlying segments assessed and the relevant terms.

A recurring theme in the IMF recommendations is the requirement for further increased supervision, including more frequent on-site inspections of financial sector actors. These inspections will put further strain on the already stretched compliance and risk resources of the institutions. 

The descriptions and recommendations strengthen our view that the application of modern technology is critical to deal with the regulatory pressure. Governance.io ensures that all data, documentation and controls in the organisation are collected and connected. The result is a transparent view of the governance processes, and the ability to quickly make available any information upon request. 

Below are the links to the 5 technical notes of the IMF:

Fund Management: Regulation, Supervision, and Systemic Risk Monitoring

This technical note focusses on the Luxembourg fund management sector; the largest in Europe by domiciled assets and the second largest in the world. It gives a thorough description of the composition and structure of the industry, and lays out a number of recommendations to the Luxembourg regulator for increased supervision. 

Anti-Money Laundering And Combatting The Financing of Terrorism

This technical note sets out the findings and recommendations made in the 2017 Financial Sector Assessment Program (FSAP) Update for Luxembourg in a few selected areas of Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). 

Selected Issues in Banking Supervision

This note examines aspects of the banking supervision regime in Luxembourg in addition to updating the findings of the previous FSAP of 2011. It also examines potential threats to the operational independence of the CSSF, the adequacy of on-site supervisory resources and potential risks arising from the continuing increase in residential house prices. 

Macroprudential Framework And Policies

This technical note gives a view on the macroprudential framework put in place by Luxembourg, and lays out a number of recommendations for enhancement of the relevant policies. It also compares the policies with 3 main principles, which are: (i) the willingness to act in the face of potential opposition, therebycountering inaction bias; (ii) the ability to act, through access to data, resources and powers; and(iii) cooperation across all agencies at the domestic and international levels.

Managing Problem Banks and Systemic Banking Crises

This Technical Note analyzes the bank failure mitigation and resolution regime, as well
as arrangements for managing a financial crisis, in Luxembourg. It focuses on the
supervision of recovery planning by banks, early intervention in banks by the authorities when
problems are identified, resolution planning by the resolution authorities, the institutional and legal
framework for bank resolution and financial safety nets, and the authorities' preparedness to deal
with a potential system-wide crisis.