The IMF Country Reports Series covers economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with officials of the country, is published at the option of the member.
This Selected Issues paper presents a short history of the development of the financial sector of Luxembourg, highlighting the strong influence of tax and regulatory advantages for its past development. It describes the structure of the banking sector today and summarizes plans for harmonizing the taxation of cross-border interest income that could potentially challenge the future development of the sector. The paper also explains the mechanisms of growth that may have been at work in Luxembourg's financial sector.