Luxembourg : Financial Sector Assessment Program—Technical Note on Stress Testing and Systemic Risk Analysis
The Luxembourg financial system is highly interconnected, diverse and complex. It has displayed a high level of resilience in the past but currently faces a backdrop of heightened economic, financial, and geopolitical uncertainty. Investment funds have grown since the 2017 FSAP, while their connections to other funds, banks, nonbank financial intermediaries, and foreign entities have also increased. The domestic banks are exposed to the ongoing downturn in credit and house price cycles, especially in the high-risk mortgage segment with floating-rate loans. Securities portfolios in large banks are mostly held-to-maturity and spread across euro area issuers. Against the risks, the financial system maintains higher capital ratios than euro area peers, has low but rising nonperforming loans, and benefits from government support measures to the private sector from an AAA-rated sovereign
Year of publication: |
2024
|
---|---|
Institutions: | International Monetary Fund / Monetary and Capital Markets Department |
Publisher: |
Washington, D.C : International Monetary Fund |
Subject: | Systemrisiko | Systemic risk | Luxemburg | Luxembourg | Finanzsektor | Financial sector | Stresstest | Stress test | Risikomanagement | Risk management | Bankrisiko | Bank risk |
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