Impact on Luxembourg Banks of the Amendments to the CRD (primarily CSSF Circular 06/273)

Frederic Gielen, Partner, avantage, moderated the session held in German and attended by the Luxembourg branches and subsidiaries of German and Swiss banking groups.

Mr. Claude Wampach, Commission de Surveillance du Secteur Financier (CSSF), outlined the key characteristics of the amendments introduced by the three CRD packages, i.e. CRD II, CRD III, and CRD IV (i.e., the European Commission's public consultation on further possible changes to the Capital Requirements). Mr. Wampach highlighted the proposed changes likely to have a significant impact on banks operating in Luxembourg, including amendments to the large exposures regime (primarily in CRD II) and changes to the qualitative liquidity regime (primarily in CRD II and already covered by CSSF Circular 09/403) as well as the changes to the quantitative liquidity regime (i.e., Section I of CRD IV, which introduces liquidity standards that include a liquidity coverage ratio requirement underpinned by a longer-term structural liquidity ratio). You can download a copy of Mr. Wampach's presentation here.

Mr. Nico Luettke, Senior Manager, avantage, commented on the introduction of CRD II, III, and IV highlighting in particular the issues around stress testing and capital planning. You can download a copy of Mr. Luettke's presentation here.

Mr. Thomas Klein, Leiter Risikomanagement/Compliance, Hauck & Aufhauser Banquiers Luxembourg provided an industry perspective on the actual implementation of the new requirements. In particular, Mr. Klein stressed some of the challenges faced by banks operating in Luxembourg and provided a few examples as to how these requirements could be implemented taking the size and complexity of a bank's activities in consideration. You can download a copy of Mr. Klein's presentation here.

The session was then rounded off with a lively question and answer session facilitated by Frederic Gielen, Partner, avantage.