Press release

Business continuity in 2020 despite COVID-19

Press release 21/20

In a context marked by the COVID-19 pandemic, Brexit and the accelerated move towards a more sustainable finance, the Commission de Surveillance du Secteur Financier (CSSF), continued its mission in 2020 to ensure the stability of the financial sector and the protection of investors and savers.

Financial crisis averted, so far

The COVID-19 pandemic is without any doubt the event that left its mark on the year 2020. The health crisis, with extreme consequences for the health of many fellow citizens and the health systems of many countries, became an economic crisis, the effects of which could however be limited – for now – through the intervention of the political powers and the central banks. Until now, the financial systems demonstrated resilience owing notably to the reforms implemented after the financial crisis of 2007-2008.

CSSF business continuity

“The CSSF’s prudential supervisory mission cannot be interrupted, not even for a single day”, states Claude Marx, Director General. “Even if we were not prepared for this pandemic – no one was, actually – our continuity plan, the digitisation and modernisation of the work organisation pursued by us for several years allowed seamless continuity of services, even during the lockdown, when, in spring 2020, more than 99 % of our agents worked offsite and partially outside Luxembourg borders.”

Innovation and flexibility, key words to support supervised entities

The lockdown and strict sanitary rules forced the CSSF to innovate. On-site inspections, for example, an indispensable tool to its supervision, continued to take place but via videoconferencing tools.

The CSSF also showed flexibility in relation to the supervised entities, be it at the level of reporting, extensive use of IT tools, capital requirements, operational constraints, massive use of teleworking, moratoria and other arrangements. In addition, it issued a series of guidance for supervised entities in these difficult circumstances.

Liquidity and loans taking centre stage

A particular concern was the supervision of liquidity of investment funds, notably of some money market funds. A crisis could be avoided through the funds’ use of certain instruments but also and foremost through the purchase of private and public sector debt by the ECB via its Pandemic Emergency Purchase Programme (PEPP).

Another focus of the CSSF was the monitoring of the development of mortgage loans, corporate loans and loans to individuals, in times of crisis. In both cases, close supervision was carried out via a specific reporting and dialogue with the industry. The follow-up was performed by the CSSF as well as the Comité du Risque Systémique.

Throughout the year, the CSSF was in close contact with the European and international institutions, notably the ECB, the EBA, ESMA, the FSB and the Basel Committee, with the objective of flexibility, in line with the law and European standards, as well as the safekeeping of the financial stability, in mind.

A resilient and responsible financial sector

The supervised entities deployed their business continuity plans successfully and no major operational incident had to be reported. Thanks to new loans granted (with or without partial State guarantee) and to moratoria, the banks acted responsibly and helped cushion the economic shock caused by the pandemic. In June 2020, moratoria reached almost EUR 3.7 billion but decreased to EUR 446 million at the end of 2020.

Brexit, SFDR and digitisation, the other topics that marked the year

The CSSF teams made substantial efforts to support the entities concerned in their preparations for Brexit in view of the end of the transitional period on 31 December 2020. Thus, they provided a framework for the access of providers established in the United Kingdom to the Luxembourg market, determined the equivalence of the British regime in the context of the MiFID II/MiFIR third-country regime and reviewed a certain number of authorisation files received in the context of Brexit.

The greening of finance is more topical than ever. The CSSF closely monitored the developments at European level, and notably the preparation of the entry into force, on 10 March 2021, of the EU regulation on sustainability-related disclosures in the financial services sector (SFDR), while Level-2 texts and the taxonomy had not yet been published. “We adopted a tolerant and firm approach: tolerance with respect to certain open questions, pending notably a clarification by the European Commission, firmness with respect to those which do not prepare themselves and fail to comply with the standards”, specifies Claude Marx. “The CSSF will not use gold plating. There will not be additional national requirements, but the ambitious goals of the EU will have to be implemented in the Luxembourg financial sector which, given its importance, will significantly contribute to the transition towards and the financing of a more sustainable economy.”

The digitisation of the financial sector, under way prior to the health crisis, was accelerated as a result of the latter, especially due to the fact that a significant number of employees had to work remotely during a longer period. “The CSSF will remain vigilant as to cybercrime risks and the risks posed by business models of entities not sufficiently preparing for the digital era”, stresses Claude Marx. As regards digitisation and sustainable finance, training and sufficient knowledge at all levels, starting with the boards of directors and the executive committees, will be key attention points.

Additional information

Additional information is available:

  • in the CSSF’s Annual Report 2020;
  • on the CSSF’s website which notably proposes video interviews on the following topics: the CSSF’s priorities, management of COVID-19, accompanying Brexit and financial innovation.



The Commission de Surveillance du Secteur Financier

The Commission de Surveillance du Secteur Financier (CSSF) is a public institution which supervises the professionals and products of the Luxembourg financial sector. It supervises, regulates, authorises, informs, and, where appropriate, carries out on-site inspections and issues sanctions. Moreover, it is in charge of promoting transparency, simplicity and fairness in the markets of financial products and services and is responsible for the enforcement of laws relating to financial consumer protection and the fight against money laundering and terrorist financing.

The CSSF carries out its prudential supervision and supervision of the markets in order to contribute to the solidity and stability of the financial sector exclusively in the public interest.

The CSSF is under the authority of the Ministry of Finance but has financial autonomy and autonomy of action as required by the highest international organisations. It has a total workforce of 950 highly qualified agents.


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