Three factors may increase that number: the arrival of more Chinese banks, specialised online banks, especially in the Fintech area, and those branches which choose Luxembourg as a consequence of Brexit. Others may leave because international banks may transform their subsidiaries into branches. There is also high levels of competition in private banking, the CSSF indicated.
58 of the 141 banks (which makes up 70% of the total market) are directly controlled by the European central bank. Their balance sheets and profits were stable for the first half of 2017. The banking sector employs 26,133, slightly less than a year ago. However, the CSSF noted that employment amounts to 45,908 for the whole financial sector.
When MPs asked the CSSF experts about the risks for the banking sector, and especially risks related to domestic mortgages, the experts noted that a legal framework could be established to determine maximum levels for the credit reimbursements based on the disposable income of a household. The CSSF representatives also mentioned in that context several draft laws, such as the transposition of the directive MIFID II.
Job creation had intensified until the beginning of 2017 and inflation was going up as well. The international economic environment has a positive outlook, and this, combined with higher than expected income from corporate taxation, led to public revenues being higher than planned. For the first 9 months of 2017, the global budget increased by 6%.
Statec also noted that the tax reform seems not to bring any negative repercussions, as taxation on company profits increases considerably despite the nominal rates having been reduced.
Statec has also indicated that a new indexation of salaries might be on the cards in mid-2018.