Luxembourg: Financial Sector Assessment Program

The landscape for managing problem banks in Luxembourg has changed fundamentally in recent years. As part of the euro area, Luxembourg is now part of a “Banking Union” (BU) where the European Central Bank (ECB) has exclusive competence to directly supervise significant institutions (SIs) while the Commission de Surveillance du Secteur Financier (CSSF), under the oversight of the ECB, directly supervises less significant institutions (LSIs). Competences for bank resolution are shared between the Single Resolution Board (SRB) and the CSSF. By transposing the BRRD and DGSD in late 2015, the authorities introduced a new resolution framework and a public deposit insurance scheme. The Resolution Board and the Depositor Protection Council were established within the CSSF to carry out resolution and administer the deposit insurance scheme respectively.