In its 2026 Annual Economic Report, released at its Basel annual meeting, the BIS warns that the AI boom has become a major, debt-financed driver of US growth whose reversal could hurt the whole economy. It also flags a new fiscal-financial stability nexus around record public debt. For Luxembourg, the world's second-largest fund domicile, the warning lands close to home.
The European Commission has published its long-awaited review of the EU's Money Market Funds Regulation, alongside new guidance recommending, for the first time, liquidity benchmarks above the legal minimums. The FAQs point to weekly liquid asset levels of 40% for stable-NAV funds and 20% for variable-NAV funds. Luxembourg's CSSF flagged the move to the local fund industry on 15 May 2026.
EU finance ministers clashed on 5 May 2026 over a plan to turn the Paris-based ESMA into a frontline supervisor of clearing houses, depositories, trading venues and crypto firms. Luxembourg, the bloc's largest fund domicile with assets above EUR 7 trillion, joined Austria, Belgium, Denmark and others in rejecting full centralisation. A leaked paper from six big states has since intensified fears that funds could drift toward Paris.