Dhe bank earthquake can also be felt in Luxembourg. After all, 125 international banks from 27 countries maintain branches in the Grand Duchy, the second largest fund location in the world after the United States. Although the volume of assets under management is likely to have fallen in the past year due to the price losses on the stock exchanges compared to the 5.9 trillion euros reached at the end of 2021, the country with 640,000 inhabitants and 200,000 commuters, including a good 50,000 Germans, remains an important financial center in Europe .
And the nervousness surrounding the banks does not leave Julie Becker, CEO of the Luxembourg Stock Exchange, unaffected: “The recent problems in the banking sector somehow surprised me because they are probably partly related to the quality of governance,” she says in the Interview with the FAZ Governance is usually understood to mean good corporate management, and some sustainable investors also apply this criterion to states.
Julie Becker, Head of the Luxembourg Stock Exchange
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Image: Luxembourg SE
For Becker, good governance also includes compliance with regulations: “This is an important prerequisite for financial stability.” That is why she is worried about the difficulties of some credit institutions, because the impression is created that the lessons of the great financial crisis have not been learned. But Becker holds back with a final assessment. It is still too early for that. The reports of the supervisory authorities would have to be awaited.
In addition to governance, environmental protection and social development have long played an important role in the neighboring country’s financial market. “The Luxembourg Stock Exchange is committed to sustainability,” says Becker. In her words, this includes the entire spectrum of environmental and climate protection, social development and good governance. The abbreviation ESG has established itself on the financial market after the English terms environment, social and governance.
The country wants to set a good example here. And the stock exchange, where securities trading plays a secondary role, plays a prominent role. “First and foremost, we are a listing platform for international bonds,” says the head of the stock exchange, pointing out that the Luxembourg Stock Exchange paved the way for bonds based on sustainable criteria due to its high standards of transparency. “It depends on a high level of transparency in order to create and secure the necessary trust among investors,” she emphasizes.
Quality of information is crucial
Since the assessment of what is green and sustainable can sometimes vary, Becker believes it is important to create the necessary transparency for investors so that they can make a well-founded decision as to whether an investment meets their criteria or not. “In the course of investor protection, we see it as our task to provide as much information as possible. We make sure that investors can immediately identify, for example, how the bonds that finance nuclear energy are being handled,” she reports.