The euro has reached its lowest level vs. the US dollar since 2002. What’s behind the falling value of the common currency?

This week, the euro reached parity vs. the US dollar for the first time in two decades, having lost one-fifth of its value against the greenback since the start of this year. The common currency, introduced in 1999 and worth an average of $1.18 over the past decade, is now way off its 2008 peak of nearly $1.60.

Today, however, it’s not just the euro that’s falling against the greenback. The US Dollar Index – which tracks the performance of the USD vs. a basket of major currencies (including the euro, yen, Swiss franc, Canadian dollar, pound sterling and Swedish krona) – has been climbing steadily since the start of 2022. That index is now up roughly 20% since January, mirroring the euro trend.

So before looking at the weakness of the common currency, it’s worth first asking why the dollar is currently so strong.

US unemployment is holding steady at very low rates, standing at 3.6% in June, but real average hourly earnings are falling due to inflation. Indeed, US inflation has soared to 40-year highs – led by gas, food and housing costs – and consumer confidence has reached the lowest level in 16 months, closely linked to inflation concerns. The International Monetary Fund recently warned of potential sustained lower US growth and higher unemployment. Talk of a possible recession continues to get louder.

On the other side of the Atlantic, euro area unemployment, at 6.6%, is almost twice as high as in the US, and inflation is likewise soaring. Just as in the US, European consumer confidence is in the basement. Recession worries are even more pronounced in Europe, especially given the more direct economic consequences of the war in Ukraine, including far greater dependency on Russian oil and natural gas.

So does the falling euro and rising dollar simply reflect the fact that, while the US economy appears increasingly fragile, the outlook for the eurozone is even worse? Partly, but it’s not that simple.

Americans and Europeans don’t just dress and eat differently; they also diverge significantly when it comes to monetary policy. In the United States, the Federal Reserve has been aggressively raising interest rates – demonstrating its willingness to risk a “policy mistake” in the pursuit of lower inflation – and reducing the size of its balance sheet. While we expect the European Central Bank to start hiking next week, it will clearly be on a far less aggressive path relative to the Fed.

Add to that the widening transatlantic interest-rate differential (the ECB’s key policy rate is still in negative territory, while the Fed has hiked by a cumulative 150 basis points). The ongoing energy shock is also already negatively impacting trade balances in Europe – the German trade balance has shrunk into deficit for the first time since 1991 – which is not helping the euro. Last but not least, geopolitical uncertainty – including zero-Covid policies in China – will continue to support safe-haven flows to the US, a trend unlikely to be reversed in the near term.

Put all these factors together and it’s very difficult to be bullish on the common currency, at least for the next few months. That’s obviously good news for euro area-based exporters and souvenir hawkers across the continent. Because this summer, inevitable flight delays notwithstanding, rest assured that American tourists will be snapping up Eiffel Tower trinkets by the armload and as much knockoff Venetian glassware as they can carry.

Investment dynamics were improving across EU regions when the war in Ukraine broke out. In the past, large-scale shocks have often exacerbated gaps in regional development. A new report, Regional Cohesion in Europe 2021-2022, published today by the EIB, examines how European regions weathered the sharp downturn caused by the pandemic and how prepared they are to face future challenges.

“The war in Ukraine risks upending Europe’s economic growth”, said Vice-President Lilyana Pavlova. “During the COVID-19 crisis, strong policy action has helped to contain the economic fallout. Yet, differences across EU regions remain. Through its tailor-made financing instruments and advisory services, the EIB stands ready to help European regions avoid economic shocks turning into lasting setbacks and to correct imbalances further exacerbated by the war. Following our Cohesion Orientation for the next seven years we are supporting the EU regions to face the socio-economic and environmental challenges of our time.”

The COVID-19 crisis tested the resilience of firms across Europe, but even more so in underdeveloped regions. In general firms proved more resilient than expected and adapted to the new circumstances. However, pre-existing vulnerabilities remained as a drag to resilience, and indeed firms in richer regions were more capable to adapt”, said EIB Chief Economist Debora Revoltella. “In current crisis, targeted public support across regions will be crucial to mitigate the immediate adverse impact of the war.”

COVID-19 shock

EU cohesion policy aims to correct imbalances between countries and regions, help lagging regions[1] to catch up and increase resilience across the European Union. The COVID-19 pandemic highlighted the risks of widening gaps between EU regions.

The pandemic strongly affected investment activity across all regions; while investment rates fell across the board, they were lowest in cohesion regions. In non-cohesion regions, almost eight out of ten firms (79%) invested. The share stood at some 77% in transition regions and 75% in less developed regions.

Firms have reacted to the pandemic and adapted to new circumstances, with those in richer regions moving faster. Across Europe, the pandemic has spurred digitalisation. More firms in non-cohesion regions have taken action, particularly to advance digitalisation (47% compared to 41% in transition regions and 38% in less developed regions). Similarly, firms in more prosperous regions were the quickest to develop new products.

The COVID-19 shock took a toll on climate-related investment. Compared to 2020, fewer firms across all regions invested in climate-related measures. The drop was stronger in cohesion regions, which already had lower levels. However, many firms see the need to respond to the climate challenge to protect against physical risks and reduce emissions.

Policy support was central to mitigating the immediate economic consequences of the COVID-19 shock across EU regions, and a large share of firms benefited. However, support was not equal across the regions. Firms in transition regions were least likely to benefit from subsidies (28%) compared to those in less developed (40%) and non-cohesion regions (37%).

COVID-19 policy support, by cohesion region


Source: EIB Investment Survey 2021.

Question: Since the start of the pandemic, have you received any financial support in response to COVID-19? This can include finance from a bank or other finance provider, or government-backed finance.

Base: All firms (excluding don’t know/refused responses).


Many firms in cohesion regions lag behind in innovation. The share of firms not undertaking innovation activity remains lowest in non-cohesion regions (48%), where many knowledge-intensive activities tend to cluster. Tackling innovation gaps looking ahead will require investment, notably in intangibles, but also stronger local innovation ecosystems.

Digital and green transition

The twin transition to a greener and more digital economy is an opportunity to increase economic resilience across the European Union and move to a more sustainable economic model. Firms are at different stages of the transition process across EU regions. More developed regions have the highest share of firms forging ahead with the twin transition and investing in green and digital technologies. 31% of firms in more developed regions can be considered green and digital, compared with 25% in transition regions and 21% in less developed regions.

Green and digital profiles (share of firms in %), by cohesion region


Source: EIB Investment Survey 2021. Base: All firms (excluding don’t know/refused responses).

Green: Firms that have already invested to tackle the impacts of weather events and reduce carbon emissions. Digital: Firms that have implemented advanced digital technologies at least in parts of their business.

Efforts to address gaps in human capital investments are key to a successful and inclusive transition across EU regions and to promoting cohesion going forward. To mitigate disparities, including in human capital, and unlock opportunities from transition on a broad basis, improvements in the business environment remain key. To tackle investment obstacles facing firms, public investment, for example in infrastructure upgrades and to address bottlenecks, will be needed and can help unlock investment synergies to foster successful regional transformation.

Background information

About the European Investment Bank

The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the EU Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals both in Europe and beyond. The EIB is active in around 160 countries. It is one of the largest multilateral providers of climate finance worldwide and recently announced that it will unlock and support €1 trillion of investment in climate action and environmental sustainability in the decade to 2030. At least 50% of EIB finance will go towards climate action and environmental sustainability by 2025. Since the end of 2020, all EIB Group financing activities have been aligned with the goals of the Paris Agreement.

Last Friday, the Luxembourg House of Financial Technology (LHoFT) celebrated its fifth anniversary with a very special event – the perfect opportunity for its CEO Nasir Zubairi to highlight the dynamism and effervescence of the FinTech community, and unveil the evolution of their graphic identity.

Guest speaker Yuriko Backes, Luxembourg Minister of Finance, started the ball rolling by confessing that, for the past five years, she had been thinking about the LHoFT “every single day” before adding, on a more serious note, that the LHoFT was undoubtedly “the beating heart of the Luxembourg FinTech community”. Yuriko Backes also reminded that her ministry will give the LHoFT its full support in the coming years – especially to attract new talents, foster diversity and a green transition, as well as seize new opportunities in an evolving regulatory landscape.

Next on stage, LFF Deputy CEO Philipp von Restorff – on behalf of Luxembourg for Finance CEO Nicolas Mackel and Secretary General Lynn Robbroeckx (who unfortunately couldn’t attend the event). Philipp reminded that the main purpose of the LHoFT five years ago was to “make available the solutions developed here and abroad to local institutions, and therefore support the financial industry so it could successfully overcome the challenges and seize many opportunities”. Hopefully the LHoFT team will “continue to write this successful FinTech story”.

For its CEO Nasir Zubairi, “people with passion can do incredible things” – undoubtedly the best driving force he could find in Luxembourg. He warmly thanked all the institutions and partners for their backing, with special gratitude to his team: “It’s the support of the community that has made all the difference”.

“Today, we estimate there are more than 250 FinTech firms operating in Luxembourg, employing more than 5,000 people […] and 146 firms have been housed in the LHoFT over the past five years, with over €1 billion in funding”, added Nasir – still amazed by such a success. To stay on top of trends and further support the FinTech ecosystem in Luxembourg, the LHoFT will mainly focus on “education, insights and talent” – with a brand new website to be launched this year.

The evening continued with great testimonials from various FinTech entrepreneurs on the evolution of the LHoFT over the past five years, and a very special magic show from Luxembourgish artist David Goldrake on the LHoFT secret ingredient, passion.

From squid-powered lights to lab-grown diamonds to edible tableware, startups are leveraging scientific advances to design more sustainable products. Investors have taken note.

Everything that can be made can be made more sustainable. Given the endless opportunities and the urgent need to address climate change, it’s no surprise that nearly every multinational and countless entrepreneurs are focused on sustainable innovation, including by redesigning existing products and developing new ones.

Such innovation is being driven by advances in technology – and by science. Women and men in lab coats, peering into microscopes, crowded around test-tube racks, may save us from some of the world’s biggest challenges – from climate change to energy dependence, from pandemic risks to food security – while also reinventing many of the more mundane products we purchase every day. And that, of course, is creating potential investment opportunities.

Consider Glowee, a French startup that has identified the genetic coding that creates bioluminescence – think of a glowing deep-sea squid – and harnessed it to develop light sources that require no electricity. Or take the example of Israel-based Lusix, which produces diamonds grown in labs powered by solar energy and recently sold a stake to LVMH, the French luxury conglomerate. Then there’s Beyond Meat, the lab-to-table plant-based meat pioneer and the first publicly traded vegan food unicorn (meaning it has a market cap in excess of $1 billion).

For every such success story, however, there are thousands of untold failures.

In a typical year, according to a Harvard Business School study, over 30,000 new products are introduced; 95% of them fall flat. More of those products than ever before are sustainable, but most of them will also fail – despite enormous demand. In a recent survey of 10,000 people across 17 countries by Simon-Kucher & Partners, a consultancy, 85% of respondents said they have shifted their purchasing behavior in the past five years towards being more sustainable. According to the same survey, sustainability is rated as an important purchasing criterion for 60% of consumers, especially Millennials (born between 1981-1996) and members of Generation Z (born in 1997 or after).

Today, just about every investor likewise considers environmental (as well as social and governance) factors in their decision making; many now expect sustainability to be the default for their portfolio. In a world characterized by lower growth and higher inflation – fueled by factors such as the war in Ukraine, ongoing supply chain disruptions and lingering COVID risks – investors also recognize that the long-term outlook for innovation, especially sustainable innovation, remains a bright spot.

The challenge, of course, is to pick winning long-term sustainable investment themes; harder still is to pick winning companies in this space. For that reason, many investors like sustainable multi-asset funds, which allocate across asset classes and geographies.

In the meantime, scientists around the world continue to explore the laboratory of new ideas.

Algaeing, for example, is creating biodegradable, non-toxic, low-energy dyes and textiles using algae produced in solar-powered vertical farms run by a firm called Algatech. Krill Design, a Milan-based startup, collects orange peels, coffee grounds, eggshells and other waste, converts that into biomaterial, then 3D prints the waste into stylish home accessories like lamps and vases. Warsaw-based Biotrem takes a similar idea one step further by producing tableware from compressed wheat; the company’s plates and cutlery are not only biodegradable, they’re also edible.

The list of firms, large and small, investing in science-backed sustainable innovation is nearly endless. Many lack the financial strength required to continue investing through the current downturn, while others will struggle with issues like pricing and supply chains. Even if most will fail, however, a small number will carve a niche and a few will even enter the mainstream.

Someday in the not-too-distant future, a couple just might pause under a squid-powered Paris streetlight, following a plant-based dinner served on delicious plates. Dressed in their finest algae, one of them will kneel, open a box made of orange peels and eggshells, and proffer a lab-grown diamond ring.

Finscale est un podcast animé par Solenne Niedercorn, Non/Executive Director and Senior Advisor in FinTech/VC, qui fait toute la lumière sur les innovations dans l’industrie de la Finance, la Banque et l’Assurance.

Cette semaine, Solenne Niedercorn reçoit Raphaël Bloch (co-fondateur et rédacteur en chef de The Big Whale) pour un podcast intitulé “La révolution Web3 en marche”.

Dans ce hors série, Raphaël nous immerge dans le monde du Web 3.0, sur lequel beaucoup de personnes ont des doutes ou des appréhensions.

Nous découvrons les formidables opportunités que représente cette nouvelle économie : dans le gaming, le divertissement, les jeux vidéos, le luxe, la musique, le sport. Nous revenons sur les cas Nike, Sorare et Universal.

Bien entendu, nous abordons la finance. Dans nos pays européens mais aussi plus loin avec le Salvador et l’Argentine.

Nous parlons également de DeFi et revenons sur les leçons à retenir des derniers “crash” comme celui de Terra/Luna.

Nous revenons sur les possibilités qu’offre la “tokenisation” des actifs financiers.

Vous comprendrez aussi que c’est avant tout l’intérêt et la curiosité qui vont vous faire rentrer dans ce nouvel écosystème pas si inaccessible que cela.

Bien entendu, nous parlons de “The Big Whale” et de la vision de ses trois co-fondateurs qui veulent réellement devenir le Media de référence du Web 3.0 en Europe.

EY Luxembourg a le plaisir d’annoncer la nomination de Fernando Longares en tant que nouveau Leader Télécommunications, Media et Technologie (TMT), succédant à Gaël Denis.

Partner au sein de la pratique Fiscalité internationale et prix de transfert depuis 2016 et actuel Leader de la pratique TMT Tax, Fernando Longares a rejoint EY en 2006. Il est titulaire d’un master du Collège d’Europe de Bruges (Belgique) et d’un diplôme en économie de l’Université de Saragosse (Espagne).

Fernando met son expérience internationale au service des clients en les accompagnant à s’adapter à des niveaux de surveillance réglementaire accrue, aux défis en matière de prix de transfert ainsi qu’aux grandes transformations fiscales telles que le récent accord de l’OCDE/G20. Ce dernier a un intérêt particulier pour le secteur puisqu’il adresse les défis fiscaux découlant de la numérisation de l’économie.

Le Luxembourg est un pays pionnier qui a su jouer et joue toujours un rôle historique dans les domaines des médias, des télécommunications, de la technologie, de l’espace et de l’innovation en général. Son attractivité a amené d’importants acteurs mondiaux à être présents ou à avoir leur siège social dans le pays.

Fernando continuera à renforcer l’empreinte mondiale d’EY Luxembourg, au service des principaux acteurs du secteur et de leurs écosystèmes mondiaux. Des startups prometteuses aux multinationales de la tech, une équipe locale de 120 personnes et un réseau mondial de plus de 55 000 professionnels accompagneront les transformations les plus urgentes du secteur grâce à leurs connaissances multidisciplinaires.

Fernando Longares commente : “Je suis ravi de prendre la relève de Gaël, qui a fait un travail fantastique en développant la gamme de services rendus à nos clients et les équipes. La technologie transforme durablement les activités des entreprises à l’échelle mondiale et crée des opportunités importantes. De la planification au choix de la bonne technologie, notre participation dans la transformation des entreprises est active et intégrale, et je me réjouis de soutenir des perspectives de croissance qui sont déjà solides. Je crois fermement que nos équipes peuvent être des atouts significatifs pour créer un changement positif dans le pays.”

Gaël Denis ajoute : “Les dernières années passées en tant que TMT Leader ont été fascinantes. Je suis fier de mes équipes qui ont fait d’EY Luxembourg un soutien précoce au secteur, en comprenant et en anticipant les besoins de nos clients. L’industrie TMT a prospéré au cours de la dernière décennie et est ressorti de la pandémie avec encore plus de force, en ne cessant jamais de se transformer. Je suis convaincu que Fernando et sa grande expérience continueront à tirer parti des opportunités. »

Gaël Denis est Partner en audit au bureau de Luxembourg depuis plus de 10 ans. Après avoir dirigé les pratiques TMT & FinTech pendant cinq ans, il a été nommé Chief Operating Officer d’EY Luxembourg.

Tous deux ont pris leurs nouvelles fonctions le 1er juillet.

Rising interest rates, the post-pandemic normalisation of government spending, high energy costs and general price increases are starting to weigh on growth, write Guy Wagner and his team in their latest monthly market report “Highlights”.

“The weakness in activity is not confined to the manufacturing sector, which is additionally affected by  the shortage of various materials and components. It is also affecting services activities despite final  lockdown measures being lifted,” says Guy Wagner, Chief Investment Officer (CIO) of the asset  management company BLI – Banque de Luxembourg Investments. In June, the purchasing managers’  activity indicators fell sharply in the United States and Europe, in both the manufacturing and services  sectors. China was the only country to post a rebound in its activity indicators, following the reopening  of its main metropolises, including Shanghai. “However, the continuation of its zero-tolerance strategy  for new Covid-19 infections could trigger a return to strict lockdown measures at the slightest sign of  excessive spread of the virus.” In Japan, economic growth continues to depend on higher exports: on  the one hand these are benefiting from the yen’s ongoing weakness, but on the other hand they are  likely to be affected by a gradual diminution of global demand.

No sign of inflation settling down 

High inflationary pressures show little sign of easing. In the United States, headline inflation rose from  to 8.6% in May, its highest level since December 1981. In the eurozone, inflation is continuing to climb  to new record levels since the introduction of the single currency. From May to June, headline inflation  also increased to 8.6%.

Record rise in the US fed funds rate 

With inflation figures showing no sign of abating, the Federal Reserve’s monetary policy committee (the  FOMC) accelerated the tightening process at its June meeting with a 75 basis point hike in interest rates,  the biggest jump since November 1994. Chairman Jerome Powell did not settle the debate as to whether  the rate hike at the next meeting at the end of July is likely to be half or three-quarters of a point. While  the top monetary official intends to guide the US economy to a soft landing rather than a recession, he  says the fight against inflation is ‘unconditional’, with the restoration of price stability the current priority.  As expected, the European Central Bank left its key interest rates unchanged at its June meeting. It

reiterated that it will end net purchases under its asset purchase programme by the end of June with a  view to starting to raise interest rates at the Governing Council meeting on 21 July.

Government bond yields continue to rise 

On the bond markets, with no sign of inflationary pressures easing, government bond yields rose sharply  in the first half of June. “In the second half of the month, this trend was reversed as fears of recession  gained the upper hand, fuelled by increasing signs of economic slowdown,” says the Luxembourgish  economist. Over the month, the benchmark 10-year yield continued to rise in the US, in Germany, in  France, in Italy and in Spain.

Sharply declining stock markets 

Equity markets fell sharply in June, posting one of the worst first-half performances in stock market  history. “Persistent inflation, interest rate hikes and the economic slowdown are weighing on equity  prices.” The MSCI All Country World Index Net Total Return expressed in euros fell by 6.2% in June  and is down 13.2% for the first half of the year, despite the beneficial effect of the strong dollar. “In terms  of sectors, healthcare and consumer staples were the most resilient in June, while energy corrected  sharply, albeit remaining the only sector recording considerable gains since the start of the year,” concludes Guy Wagner.

Since the EIB pioneered its Climate Awareness Bond fifteen years ago, green bonds have been moving from niche to mainstream. Complemented by social and sustainability bonds and helped by legislation on sustainable finance, green bonds are becoming increasingly important in directing capital towards sustainable economic activities.

On July 5th 2007 the European Investment Bank (EIB) issued its inaugural Climate Awareness Bond (“CAB”) – the world’s first green bond. The global green bond market has since surpassed the threshold of € 1.5tn in cumulative issuance and is supplemented by around € 720bn of social and sustainability bonds.

[1] Based on data from Bloomberg New Energy Finance



Green, social and sustainability bonds with dedicated use of proceeds – like the EIB’s Climate Awareness Bonds and Sustainability Awareness Bonds – enable investors to track the flow of their funds to the sustainable economy, promoting transparency, accountability, reliability and comparability in sustainable finance.

Proceeds from CABs are allocated to projects that contribute substantially to climate change mitigation, currently in the fields of renewable energy, energy efficiency, low-carbon transport and innovative low-carbon technologies. SAB proceeds are allocated to projects that contribute substantially to environmental and social objectives beyond climate change mitigation (for example, pollution prevention and control and universal access to affordable health services). Currently, funds raised with SABs are eligible to be invested in projects in the areas of water, health (including COVID-19-related projects), education, housing and forestry.

Today, the EIB is the largest multilateral development bank issuer of green bonds with close to €50 billion of CABs and €9 billion of SABs in 22 currencies. In the period 2019-2022, the share of these bonds of EIB’s total issuance has grown from 7% to 27% (see chart below), reflecting the progressive alignment of the EIB’s sustainability lending with the EU Taxonomy Regulation.

In response to growing volumes of eligible disbursements and investor demand for larger, more liquid bonds, the Bank has started issuing CABs in Euro Area Reference Note (EARN) format. EARNs normally have a minimum size of €3bn, which permits to add “benchmark” character to sustainability funding. To highlight the fifteenth anniversary of the first green bond, in May this year the EIB issued a first €4 billion Climate Awareness EARN due June 15th 2032.



Financial markets play a key role in tackling climate change and achieving the Sustainable Development Goals,” said EIB President Werner Hoyer. “We will not achieve a low-carbon economy without channelling more public and private investors’ money into clearly defined green projects. Nor we will tackle poverty in all its forms if we do not provide long-term financing for sustainable infrastructure. Since 2007, the EIB has been at the forefront of the greening of the financial markets. By turning green bonds from niche to mainstream, we connected the dots between sustainable finance and sustainable projects that turn investors’ money into public good.

What comes next in the green, social and sustainability bond markets?

In 2016, the G20 Green Finance Synthesis Report highlighted that “the lack of clarity as to what constitutes green finance activities and products (such as green loans and green bonds) can be an obstacle for investors, companies and banks seeking to identify opportunities for green investing”.

The global emergence of taxonomies that define sustainable economic activities has the potential to enhance clarity. GSS bonds are key in this endeavor: by applying the taxonomies and clarifying which economic activities contribute substantially to sustainability, the GSS bonds will also drive the classification of other areas of the economy, helping the transmission of strategic knowledge that will ultimately benefit society at large. Such process can increase international comparability between markets and highlight different approach strategies, further facilitating cross-border capital flows through eliminating uncertainty in the sector.

In the future, all economic activities should be mapped across climate, environmental and social objectives according to consistent sets of criteria.

Harnessing the potential of GSS bonds on a global scale will require an increase of international comparability to reduce uncertainty and facilitate cross-border capital flows. As the G20 report highlighted in 2016, this could be achieved via internationally comparable indicators and does not necessitate a one-size-fits-all approach. In 2017 the EIB, together with the China Green Finance Committee, developed a methodological and practical blue print in a White paper on the need for a common language in green finance. The International Platform on Sustainable Finance is now continuing and extending this initiative in its working group on a “Common Ground Taxonomy”.

With the EU Taxonomy Regulation and the proposed EU Green Bond Standard, the European Union aims to establish a framework in which market forces can efficiently deploy capital at the service of sustainability. The immediate challenge ahead lies in making this ambitious legislative framework work in practice.

In its Climate Bank Roadmap, the Bank commits to progressively aligning its sustainability lending and funding with the framework of the EU Taxonomy Regulation as this develops over time. The CAB and SAB Frameworks[1] published in 2021 provide information of the Bank’s early application of evolving EU sustainable finance legislation.


As at 31 May 2022, the total net assets of undertakings for collective investment – comprising UCIs subject to the 2010 Law – specialised investment funds and SICARs amounted to EUR 5,367.849 billion compared to EUR 5,477.104 billion as at 30 April 2022. Over the last twelve months, the volume of net assets rose by 0.66%.

I. Overall situation

The Luxembourg UCI industry thus registered a negative variation amounting to EUR 109.255 billion in May. This decrease represents the sum of negative net capital investments of EUR 17.346 billion (-0.32%) and of the negative development of financial markets amounting to EUR 91.909 billion (-1.68%).

The development of undertakings for collective investment is as follows:

The number of undertakings for collective investment (UCIs) taken into consideration totalled 3,443, against 3,454 the previous month. A total of 2,256 entities adopted an umbrella structure representing 13,205 sub-funds. Adding the 1,187 entities with a traditional UCI structure to that figure, a total of 14,392 fund units were active in the financial centre.

As regards the impact of financial markets on the main categories of undertakings for collective investment and the net capital investment in these UCIs, the following can be said for the month of May.

The financial market activity was weakened by the persistence of the inflation tensions, the continuing Ukraine crisis, the Chinese lockdown policy and its impact on supply chains.

Concerning developed markets, the European equity UCI category registered a negative performance, reflecting the fall-back of most confidence indicators, the uncertainty associated to the still rising inflation, the potential consequences of the European partial ban on imports of Russian oil. The US equity UCI category similarly receded, due to the decline in consumer confidence, a deceleration of the activity in both industry and services, and to record inflation. The Japanese equity UCI category, on the basis of positive corporate results recorded a slightly positive performance which was offset by the depreciation of the JPY against the EUR.

As for emerging countries, the Asian equity UCI category overall realised a negative performance in May in consequence of market decline in India, Indonesia, Malaysia and Singapore, despite the positive market performances in China and South Korea in a context of progressive easing of the COVID-19 restrictions.

The Eastern European equity UCI category realised a negative performance due to the lasting Ukraine crisis and due to the negative performance of some equity markets, like Hungary and despite the positive market performances in Poland and Czech Republic, and the appreciation of the Russian rouble of about 10%. The Latin American equity UCI category was the best-performing equity category in May, driven in Brazil, Peru, Chile mainly by currency appreciation and commodity export revenues.

In May, the equity UCI categories registered a negative net capital investment, mainly driven by outflows in the European and US equity UCI categories.

Development of equity UCIs during the month of May 2022*


Although the inflation figures remained high and the monetary policy stances got relatively hawkish on both sides of the Atlantic, we could observe in May some divergence in the evolution of the yields: further rising in Europe, declining in the US.

Concerning the EUR denominated bond UCI category, government bond yields rose as the ECB confirmed that QE net purchases are likely to end in the third quarter, allowing a rate hike in July, in line with forward guidance. As for corporate markets, European Investment Grade bonds declined and the EUR denominated bond UCI category in May overall registered a negative performance.

Concerning the USD denominated bond UCI category, the Federal Reserve (“Fed”) raised its target rate by 50bp at 1 percent and announced that the downsizing of its balance sheet would start as from June. As this rate hike was to some extent anticipated by the markets, and given the deceleration of the activity, the bond price increased (the yields decreased). Overall, due to the depreciation of the USD against the EUR, the US denominated bond UCI category registered a negative performance.

The Emerging Markets bond category finished the month in negative territory in the context of persistent high inflation rates, rising interest rates and geopolitical tensions.

In May, fixed income UCI categories registered an overall negative net capital investment. The Global market bonds category recorded the highest outflows.

Development of fixed income UCIs during the month of May 2022*


The development of net assets of diversified Luxembourg UCIs and funds of funds is illustrated in the table below:

Development of diversified UCIs and funds of funds during the month of May 2022*


II. Breakdown of the number and net assets of UCIs

During the month under review, the following eight undertakings for collective investment have been registered on the official list:

UCITS Part I 2010 Law:

  • ATLAS RESPONSIBLE INVESTORS SICAV, 12, rue Eugène Ruppert, L-2453 Luxembourg
  • FRANKFURTER UCITS ETF, 15, rue de Flaxweiler, L-6776 Grevenmacher
  • RESPONSABILITY IMPACT UCITS (LUX), 5, rue Jean Monnet, L-2180 Luxembourg
  • UNINACHHALTIG AKTIEN INFRASTRUKTUR, 3, Heienhaff, L-1736 Senningerberg
  • UNIZUKUNFT WELT, 3, Heienhaff, L-1736 Senningerberg

UCIs Part II 2010 Law:

  • BLACKSTONE EUROPEAN PRIVATE CREDIT FUND (MASTER) FCP, 2-4, rue Eugène Ruppert, L-2453 Luxembourg
  • BLACKSTONE EUROPEAN PRIVATE CREDIT FUND SICAV, 11-13, boulevard de la Foire, L-1528 Luxembourg


  • MGG STRATEGIC SICAF SIF S.A., 18 avenue de la Porte Neuve, L-2227 Luxembourg

The following nineteen undertakings for collective investment have been deregistered from the official list during the month under review:

UCITS Part I 2010 Law:

  • AKROBAT FUND, 15, rue de Flaxweiler, L-6776 Grevenmacher
  • BNP PARIBAS PLAN, 10, rue Edward Steichen, L-2540 Luxembourg
  • CIRCLE FUND, 94, rue du Kiem, L-1857 Luxembourg
  • DONATELLO SICAV, 49, avenue J-F Kennedy, L-1855 Luxembourg
  • EURIZON MULTIMANAGER STARS FUND, 28, boulevard Kockelscheuer, L-1821 Luxembourg
  • LUXICAV, 19-21, boulevard du Prince Henri, L-1724 Luxembourg
  • OLB-FONDSCONCEPTPLUS CHANCE, Bockenheimer Landstraße 42-44, 60323 Frankfurt am Main1
  • OLB-FONDSCONCEPTPLUS ERTRAG, Bockenheimer Landstraße 42-44, 60323 Frankfurt am Main1
  • TRUSTEAM FUNDS, 14, boulevard Royal, L-2449 Luxembourg
  • YELLOW FUNDS SICAV, 60, avenue J-F Kennedy, L-1855 Luxembourg

UCIs Part II 2010 Law:

  • LUXICAV PLUS, 28, boulevard Kockelscheuer, L-1821 Luxembourg
  • MPF SINO, 15, rue de Flaxweiler, L-6776 Grevenmacher


  • 4IP EUROPEAN REAL ESTATE FUND OF FUNDS, 11-13, boulevard de la Foire, L-1528 Luxembourg
  • CORPORATE XII, 2, boulevard Konrad Adenauer, L-1115 Luxembourg
  • EYNAV OPPORTUNITY SCA, SICAV-SIF, 111, route d’Arlon, L-8009 Strassen
  • KIBO AFRICA FUND, 2, boulevard de la Foire, L-1528 Luxembourg
  • ROTHORN, 12, rue Eugène Ruppert, L-2453 Luxembourg
  • SICAV-FIS EUROPE LBO V PORTE NEUVE, 50, avenue J-F Kennedy, L-1855 Luxembourg
  • SWISSCANTO (LU) PRIVATE DEBT FUND, FCP-SIF, 19, rue de Bitbourg, L-1273 Luxembourg

Transfers of crypto-assets will be traced and identified to prevent money laundering, terrorist financing, and other crimes, says the new legislation agreed on Wednesday.

Parliament and Council negotiators reached a provisional deal on a new bill aiming to ensure that crypto transfers can always be traced and suspicious transactions blocked.

Traceability from the first euro sent

The agreement extends the so-called “travel rule”, already existing in traditional finance, to cover transfers in crypto assets. This rule requires that information on the source of the asset and its beneficiary travels with the transaction and is stored on both sides of the transfer. Crypto-assets service providers (CASPs) will be obliged to provide this information to competent authorities if an investigation is conducted into money laundering and terrorist financing.

As crypto-asset transactions easily circumvent existing thresholds that would trigger traceability requirements, Parliament negotiators assured that there is no minimum thresholds nor exemptions for low-value transfers, as originally proposed.

Regarding protecting personal data, including a name and an address required by the travel rule, negotiators agreed that if there is no guarantee that privacy is upheld by the receiving end, such data should not be sent.

Curbing money laundering and terrorism financing

Before making the crypto-assets available to beneficiaries, providers will have to verify that the source of the asset is not subject to restrictive measures or sanctions, and there are no risks of money laundering or terrorism financing.

Negotiators agreed that the set-up of a public register for non-compliant and non-supervised CASPs, with which EU CASPs would not be allowed to trade, will be covered in the Markets in Crypto-assets rules (MiCA), currently being negotiated.

Un-hosted wallets

The rules would also cover transactions from so-called un-hosted wallets (a crypto-asset wallet address that is in the custody of a private user) when they interact with hosted wallets managed by CASPs.

In case a customer sends or receives more than 1000 euros to or from their own un-hosted wallet, the CASP will need to verify whether the un-hosted wallet is effectively owned or controlled by this customer.

The rules do not apply to person-to-person transfers conducted without a provider, such as bitcoins trading platforms, or among providers acting on their own behalf.


Ernest Urtasun (Greens/EFA, ES)co-rapporteur for ECON said: “This new regulation strengthens the European framework to fight money-laundering, reduces the risks of fraud and makes crypto-asset transactions more secure.

The EU travel rule will ensure that CASPs can prevent and detect sanctioned addresses and that transfers of crypto-assets are fully traceable.

This regulation introduces one of the most ambitious travel rules for transfers of crypto assets in the world. We hope other jurisdictions will follow the ambitious and rigorous approach the co-legislators agreed today.”

Co-rapporteur for LIBE Assita Kanko (ECR, BE) said: “For too long, crypto-assets have been under the radar of our law enforcement authorities. Terrorists used crypto for fundraising, to access to child pornography and criminals laundered their proceeds through it. This has really harmed people’s lives and raised doubts about the crypto sector.

Today, we have taken a big step to address these problems. It will be much harder to misuse crypto-assets and innocent traders and investors will be better protected. The extended travel rule will make that world safer”.

Next steps

Parliament, Council and Commission are now working on the technical aspects of the text. Thereafter, the agreement must be approved by the Economic and Monetary Affairs and Civil Liberties and Justice Committees and Parliament as a whole, before it can enter into force.