Finance minister Yuriko Backes called a meeting to evaluate the risks the sanctions on Russia could pose for Luxembourg's financial stability.  Photo: Patricia Pitsch - Maison Moderne Publishing SA

Finance minister Yuriko Backes called a meeting to evaluate the risks the sanctions on Russia could pose for Luxembourg's financial stability.  Photo: Patricia Pitsch - Maison Moderne Publishing SA

Luxembourg’s systemic risk committee on Wednesday concluded that international sanctions slapped on Russia do not currently “present an endogenous risk to financial stability.”

Finance minister Yuriko Backes (DP) convened the committee, which is composed of four members, including the government, the central bank of Luxembourg, finance sector regulator CSSF  and the insurance watchdog CAA. The different actors assessed the situation in their respective areas.

Russia had--following the start of its widespread invasion of Ukraine last week--been sanctioned at European and international level. Aside from a ban on the overflight of EU airspace, a ban on transactions with the Russian Central Bank was decided. The EU also --including asset freezes and travel bans on a  total of 680 persons and 53 entities.

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“The direct exposure of supervised entities remains marginal,” the finance ministry stated in an official statement.

Economy minister Franz Fayot (LSAP) in an interview with the Luxemburger Wort on 2 March, had stated that his ministry was still drawing up a list of the Luxembourg businesses affected by the sanctions on Russia. The true impact of the measures could only be known after a definite list was available.

Fayot had also stated that due to Luxembourg’s previously “good economic relationships” with Russia, the exclusion of Russian banks from the Swift network would have a certain impact on the grand duchy’s status as a financial centre.

Russian nationals Mikhail Fridman, founder of Luxembourg-headquartered investment company Letterone, and Petr Aven, a member of the group’s board of directors, the EU’s sanctions against them. The businessmen said they have no financial or political relationship with Putin or the Kremlin.