/Vhat's
Luxembourg
Luxembourg -
SMALL IS SMART
UPPLEMENT FOR WHAT'S NewS —JANUARY 1997
The tiny dot of a country wedged between Germany, France
and Belgium may be landlocked, but it has still managed to
build a powerful reputation as an 'offshore' and private
banking centre. All the big names are there - in the Grand
Duchy's one and only city, also Luxembourg. And so, of
course, is Rabobank. What's NewS goes visiting to find out
why in financial terms small is very smart.
jean-Pierre Van Keymeulen
'I think the size of the country
and the kind of flexibility that
goes with "small" has a lot to
do with Luxemhourg's success
as an international financial
centre,' says our general
manager on the spot Jean-
Pierre Van Keymeulen. Almost
10 percent of the work force,
many of whom are foreigners,
work in the financial sector at
the 220 hanks (1995). 'As a
comparison, the figures were 3
percent and 37 in 1970. That
rapid growth has everything to
do with government
recognition of how important
the services sector is for the
country's prosperity;
Luxembourg has the highest
Standard of living in the world
and we want to keep it that
way. But the Grand Duchy has
few natural resources - coal
and steel are the main
industries along with
agriculture. This explains the
strong focus on a thriving
services sector.'
RAPID RESPONSE
The key to its success has
everything to do with size and
attitude. Because the country is
small and not weighed down
with massive bureaucracy, it is
able to respond rapidly to
changes in European and
international legislation to
create the kind of environment
where offshore and private
banking can flourish.
However, the authorities here
also ensure that environment is
subject to strict regulation. So
it is hardly surprising that
Luxembourg has been highly
successful as a centre for
international private banking -
and increasingly as an
insurance and reinsurance
centre. 'We may not have the
longstanding reputation of
Switzerland,' says Van
Keymeulen, 'but a banker here
said recently that if
Switzerland is the Rolls Royce
of private banking, then
Luxembourg is definitely the
Mercedes.'
BUILDING NET WORTH
You may be forgiven for
wondering if this 'special' is
going to turn into an overview
of the Luxembourg economy.
While Van Keymeulen and his
whole team are willing and
even eager to talk, the one
thing they don't really want to
talk about is clients. 'We're
private bankers, you see,' says
Ed Schaeken, head of personal
banking. 'It wouldn't be very
discrete to discuss our clients
with anyone outside the team
here. Let me just say this: the
majority of our clients are
typically the kind of ex-
patriates who are building up
their net worth, although the
relationship managers down
FINANCIEEL CENTRUM
Luxemburg staat bekend als financieel centrum met name op het gebied van private banking en offshore producten. Sinds de
jaren 70 zijn ook de investment funds in Luxemburg sterk ontwikkeld. Dienstverlening staat hoog in het vaandel, meer dan 10%
van de werkende bevolking werkt bij een van de 220 banken die hier gevestigd zijn. Ook verzekeringen, vooral levensverzekeringen, is een
groeiende markt.
NETHERLAND
LUXEMBOUR
FRANCE
BELGIUM
GERMANY
