That in itself should provide – and it probably has provided – the necessary incentive for the banks to monitor carefully their lending activities and to assess properly the reimbursement capacity of the borrowers. What were the immediate consequences of the financial market turbulences on the Luxembourg financial centre?
Despite recent favourable information on the relative growth performance of the Luxembourg fund industry, monthly data as illustrated by chart 8, show a decreasing trend of net asset growth rates. This trend can be attributed to both the cyclicality of funds’ activities and their dependence on market performance as well as to a strong competition from other major financial centres. .