The slow demise of a capital market

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The slow demise of a capital market

The Grand Duchy's bankers don't seem too worried, but Luxembourg's point of difference as a financial centre is fast disappearing. James Rutter finds out how its bankers intend to fill their time after the introduction of the euro.

Leading bookrunners of Luxembourg franc issues 1997/98
Lfr bn issues
1 Banque Générale du Luxemboug 52 25
2 Banque Internationale à Luxembourg 47 25
3 Banque et Caisse d'Epargne de l'Etat 40 20
4 Banque Bruxelles Lambert 27 13
5 Bancob Savings Bank 13 6
6 Kredietbank 8 5
7 ABN Amro 6 3
8 Paribas 6 3
9 Cera 5 3
10 Ippa Bank 2 2

It will be a rich irony if, as many people expect, the coming of the euro signals the end for Luxembourg's capital market. For the Grand Duchy can lay claim to being the birthplace of Europe's single-currency bond market. In March 1981, Kredietbank Luxembourg led the first bond to be denominated in Ecu. The issue was for Luxembourg-based Softe, the financial subsidiary of Italian telephone company Stet.

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