Luxembourg is the largest European fund domicile and the second largest fund centre in the world after the US.
With its track record in investment funds, its flexible and efficient legal, regulatory and tax environment, Luxembourg is an attractive and strategic location for a debt platform.Shadow banking accounts for 40% of total investment in Europe, although it declined slightly in 2018. According to ECB figures, Luxembourg is by far the largest player in Europe, with € 14 trillion in assets managed in the country. In its July 2019 report on shadow banking, the European Central Bank estimates its weight at 41.900 billion euros for the whole of the European Union. For the euro area, the total is 33,600 billion euros. The term “shadow banking” – finance from the shadows – includes all financing activities of the economy outside the banking sector. Investment funds are therefore a big part of it. Note that the term has a negative connotation, while the activities are completely legal, the ECB has chosen to replace it with the term “non-bank financial intermediation”