Luxembourg plots to steal London’s financial crown
The tiny nation wants to become “the European location of choice” for global financial services firms, and is already the biggest centre for fund management in the EU, reports the Telegraph.
Luxembourg’s finance sector has set out plans to become Europe’s leading financial centre in the next five years, plotting to attract business in areas from global banking to fintech startups – at a time when Britain is worrying about its own place in the financial world.
“Luxembourg’s financial centre will continue to improve its competitiveness and establish itself as the destination of choice in the European Union for international investors,” said Nicolas Mackel, chief of public-private group Luxembourg for Finance.
“In particular, Luxembourg is strategically positioned to become one of Europe’s fintech leaders and offers the physical, regulatory and investment environment for financial technology businesses to bring new products and services to market.”
The LUXFIN 2020 project is a clear challenge to London, Frankfurt and other financial hotspots in Europe.
London is currently the biggest financial centre in Europe and by some counts the world, but many big firms fear that a British exit from the European Union could harm that image, while higher taxes and tighter regulation in the UK are also a threat.
Luxembourg’s plans to dominate the financial world are detailed in a report.
The report does not directly mention the possibility of the UK leaving the EU, but does point out that Luxembourg “is firmly rooted within and strongly committed to the European Union.”
The country’s place within the Eurozone – compared with Britain’s place outside the single currency – is also highlighted.
“It is the ideal location from where to operate, whether in the Eurozone or more generally in the EU as a whole,” the report said.
It also stresses Luxembourg’s transparency as a strong point, and is keen to clean up the country’s reputation.
“Its financial industry… grew to a global role without being covered by banking secrecy. Its wealth management industry has risen to prominence for its unique expertise and lately came to suffer more from the stigma of tax secrecy,” the report said.
“Since the crisis, the world of financial services has gone through major changes, in the regulatory sphere and in matters of tax transparency. Luxembourg is unequivocally committed to tax transparency and has embraced this move.”
The country’s plan for growth includes promoting technological innovation as well as inviting business from emerging financial markets, including renminbi operations and Islamic finance.
