This article was originally published in French on the chd.lu website and has been mechanically translated by AmCham.
CSSF Director Claude Marx appeared before a parliamentary committee to brief MPs on the current situation in the financial sector. The Commission de Surveillance du Secteur Financier (CSSF) is the supervisory authority for Luxembourg’s financial sector, including banking.
From the outset, CSSF Director Claude Marx explained that financial sector activity in 2023 would be stable. As for forecasts for 2024, Claude Marx suggested that the situation should remain stable, while highlighting the fact that we are operating in an unstable geopolitical context, and that the crisis in certain branches of the construction industry could have negative repercussions on the financial sector. In his view, “the environment in which we operate is not without risk”.
The CSSF also noted that banks are benefiting from the sharp rise in interest rates in recent months, which has boosted their interest margins. “Interest margins have increased, something that has not happened in the last ten years”, Claude Marx told the parliamentarians.
During the exchange, one MP asked about Luxembourg’s attractiveness in the investment fund sector, particularly in the face of Dublin, which appears to be a serious competitor to the Grand Duchy. Claude Marx pointed out that following Brexit, several companies active in hedge funds have set up in Luxembourg. He sees this as a positive development. In general, the CSSF Director emphasized that Luxembourg remains a hub within the EU, but that Ireland is indeed a popular destination for ETF fund establishment due to favorable Irish regulations. According to Claude Marx, Luxembourg, as an international financial center, still has opportunities and alternatives to strengthen its fund competitiveness.
Another MP asked whether the financial sector was struggling to attract talent. According to the CSSF Director, the problem lies not in finding talent in specific fields, but rather in the obstacles encountered when integrating this talent into the Luxembourg financial sector, particularly due to conditions in the real estate market and the education sector.
Questioned by an MP about the resources available to the CSSF, Claude Marx pointed out that the CSSF had equipped itself well in recent years, and that it was now necessary to recruit certain profiles, such as data analysts and data scientists. The Director highlighted the CSSF’s major commitment to training its staff and improving the efficiency of its workflows.
An MP raised the question of the repercussions of digitization on the financial sector, including its impact on employment. Claude Marx acknowledged that digitization has indeed transformed the financial sector in the same way as it has other industries. However, he noted that the radical transformation feared a few years ago is taking place at a slower pace than expected. In his view, this situation does not give cause for particular concern, and the sector is said to be gradually adapting to developments such as blockchain and artificial intelligence.
