Luxembourg: Financial Sector Assessment Program: Technical Note-Risk Analysis

August 28, 2017

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Format: Chicago

Luxembourg: Financial Sector Assessment Program: Technical Note-Risk Analysis, (USA: International Monetary Fund, 2017) accessed December 22, 2024

Summary

This Technical Note reviews the stability of Luxembourg’s financial system. The financial soundness indicators for Luxembourg’s financial system, which plays a key role in the intermediation of financial capital, have remained relatively robust in recent years. Household stress test results suggest that households’ solvency would be significantly affected by a drop in income and housing prices and a rise in unemployment. Bank liquidity displays broad resilience, but would be weakened should wholesale funding dry up or funding stress emerge in foreign currencies. Banks were found to be less vulnerable to direct contagion risk through bilateral exposure; however, most banks have considerable cross-border exposure.

Subject: Banking, Commercial banks, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Liquidity requirements, Liquidity stress testing, Mutual funds, Stress testing

Keywords: Bank, Commercial banks, CR, Credit risk, Europe, Foreign exchange, Global, Hurdle rate, Interest rate, Investment fund industry, Investment fund liquidity risk, ISCR, Liquidity, Liquidity requirements, Liquidity shortfall, Liquidity stress test result, Liquidity stress testing, Liquidity stress tests, Mutual funds, Quantitative analysis, Sector stress tests, Short-term debt, Stress test result, Stress testing

Publication Details

Pages:

114
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2017/261
Stock No:

1LUXEA2017010
ISBN:

9781484316832
ISSN:

1934-7685

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