Luxembourg creates a Committee on systemic risk

Banking Regulatory, Compliance, Financial Sector, Supervision

systemic.risk

Luxembourg has adopted, during the Parliament’s session of 18 March 2015, the law constituting the committee on systemic risk, which implements 2 recommendations of the European committee on systemic risk (recommendation CERS/2011/3 and CERS/2013/1), itself created in the aftermath of the 2008 financial crisis as a result of the conclusions of the de Larosière commission report of 2010. The Luxembourg comittee for systemic risk is a collegial body comprising representatives from the Ministry of Finance, the Luxembourg Central Bank, the CSSF and the Commissariat aux Assurances (Insurance supervisor). It is presided by the Minister of Finance. Its main task is one of macroprudential supervision of the Luxembourg financial sector. The Committee is tasked with monitoring and preventing the development of systemic threats to the stability of the Luxembourg financial sector. To that end, it can issue opinions, alerts and recommendations to its members and to entities of the financial sector. The addressees of the Committee’s recommendations are held to an obligation to “comply or explain”. For the purposes of their role in the Committee, its members are not bound by the professional secrecy to which they are normally subject in the context of their supervisory roles. At the European level, the Committee cooperates with the European Committee on systemic risk.

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