Yuriko Backes “pledged support” to Luxembourg’s funds industry at an asset management conference, 22 March 2022. Library picture: Yuriko Backes is seen speaking at a tax conference, 11 January 2022. Photo: Romain Gamba/Maison Moderne

Yuriko Backes “pledged support” to Luxembourg’s funds industry at an asset management conference, 22 March 2022. Library picture: Yuriko Backes is seen speaking at a tax conference, 11 January 2022. Photo: Romain Gamba/Maison Moderne

The grand duchy’s newish finance minister has told investment fund executives that she would back the Luxembourg funds sector, at both EU and national levels.

On Tuesday, (DP) addressed an Association of the Luxembourg Fund Industry conference for the first time since being named finance minister in January. In her remarks, Backes made five points:

1. Backes “pledged support to sector.” She noted that the financial industry is one of the main drivers of Luxembourg’s economy and the funds sector “is a key pillar.”

2. Economic clouds are on the horizon, Backes observed. Growth forecasts have been cut, while inflation rates continue to rise. Sanctions on Russia “will have a cost” on Europe’s and Luxembourg’s economies, but that is a “price we have to pay.” While Luxembourg investment funds are marginally exposed to Russia and Ukraine directly, Backes noted the indirect impact on the economy would weigh on asset managers.

3. At the same time, Backes said she was confident in Luxembourg’s economy and the financial sector in particular, which was “proven to be very resilient” during the pandemic. This is a cause for optimism, she stated. To support the funds sector, especially as private markets and digital technologies become more important, Backes said she “wanted to work with your industry” in setting the right economic conditions, such as improvements to the education and legal systems, and “innovation support”.

4. Backes said she wanted to defend the single European market and EU norms such as fund delegation. (The head of Luxembourg’s fund regulator, Claude Marx, ). “I will continue to defend the cross-border model” at EU level, Backes stated.

5. When it comes to tackling climate change, billions of euros in investments are needed, Backes observed. “The fund industry is playing a key role” in the green economic transition, observing that 40% of European funds are based in Luxembourg.