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A typology of captive financial institutions and money lenders (sector S127) in Luxembourg

In: New developments in central bank statistics around the world

Author

Listed:
  • Gabriele Di Filippo
  • Frédéric Pierret

Abstract

The paper presents a typology of captive financial institutions and money lenders (sector S127) in Luxembourg. Given data availability, the analysis relies on a sub-sample of the whole population of S127 firms. This sub-sample features S127 firms whose total assets are at least equal to EUR 500 million. As of Q4 2018, this sub-sample represents about 5% of the total number of S127 firms in Luxembourg, and about 85% of the total assets held by S127 firms in Luxembourg. The period of analysis spans Q4 2014 to Q4 2019. In terms of number and on average over the period Q4 2014 – Q4 2019, the sample of S127 corporations regroups holding corporations (42%), intragroup lending companies (25%), mixed structures (19%), conduits (7%) and loan origination companies (4%). These corporations represent about 98% of the total number of S127 companies whose total assets of at least EUR 500 million. The remaining types that complete the sample of S127 entities consist of captive factoring and invoicing corporations, companies with predominant non-financial assets, extra-group loan origination firms, wealth-holding entities and captive financial leasing corporations. In addition, on average over the period Q4 2014 – Q4 2019, holding corporations own the largest share of total assets (55%) followed by intragroup lending companies (22%), mixed structures (14%), conduits (6%) and loan origination companies (2%). These corporations account for about 99% of the total assets held by S127 companies whose total assets are at least equal to EUR 500 million. The relative importance of holding corporations, intragroup lending companies, mixed structures, conduits and loan origination companies suggests that Luxembourg plays the role of a global financial centre for MNEs. The latter benefit from Luxembourg as a financial platform to manage their business activities and structure their corporate investments.
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Suggested Citation

  • Gabriele Di Filippo & Frédéric Pierret, 2021. "A typology of captive financial institutions and money lenders (sector S127) in Luxembourg," IFC Bulletins chapters, in: Bank for International Settlements (ed.), New developments in central bank statistics around the world, volume 55, Bank for International Settlements.
    • Handle: RePEc:bis:bisifc:55-21
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    References listed on IDEAS

    as
    1. John H. Dunning & Sarianna M. Lundan, 2008. "Multinational Enterprises and the Global Economy, Second Edition," Books, Edward Elgar Publishing, number 3215.
    2. Asier Cornejo Pérez & Javier Huerga, 2016. "The Centralised Securities Database (CSDB) - Standardised micro data for financial stability purposes," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Combining micro and macro data for financial stability analysis, volume 41, Bank for International Settlements.
    3. Charles Cadestin & Koen De Backer & Isabelle Desnoyers-James & Sébastien Miroudot & Ming Ye & Davide Rigo, 2018. "Multinational enterprises and global value chains: New Insights on the trade-investment nexus," OECD Science, Technology and Industry Working Papers 2018/05, OECD Publishing.
    4. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437.
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    Cited by:

    1. Gabriele Di Filippo & Frédéric Pierret, 2023. "A typology of captive financial institutions in Luxembourg: lessons from a new database," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Post-pandemic landscape for central bank statistics, volume 58, Bank for International Settlements.
    2. Di Filippo, Gabriele & Pierret, Frédéric, 2020. "Key Features of Captive Financial Institutions and Money Lenders (sector S127) in Luxembourg," MPRA Paper 111872, University Library of Munich, Germany, revised Dec 2020.

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    More about this item

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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