From finance in general to Luxembourg in particular
Interview with Alain Picquet, a partner at KPMG Luxembourg in charge of Advisory and Markets.
Is the current crisis having a different impact on the various branches of the financial world?
My personal feeling is that the crisis is being felt throughout the banking industry. We will return to a better balance between the world of business and that of finance. The least indebted countries like Canada are doing better, the U.S. benefit from their excellent positioning in emerging markets, but Europe is suffering a double crisis: global and European. Consequently, banks are impacted globally: they are reducing the size of their balance sheet, are more selective and are forced to improve their solvency ratio. In short, they are seeking to restore their credibility.
If you had an influence on Luxembourg’s economic policy, what would you do?
Just compare the gross national product per capita to see the unique position we enjoy in the world. To preserve it, I would start by working on our image: Luxembourg is and must be considered one of the most reputable countries in terms of transparency. In the same vein, I think every effort should be made to keep the triple AAA rating. We need to reform pensions and wage indexation. This is a sensitive issue that politicians are reluctant to face, but it is crucial because it has a direct impact on competitiveness and sustainability of the Luxembourg model. Finally I would do more to foster training: why not reinvest the savings from reforms in education credits to maintain the excellence of employees in the Grand Duchy?
Which companies are most resistant to the crisis?
Those that have a clear and positive long-term vision, but that can adapt quickly. They share a great intransigence when it comes to quality, liquidity and fundamentals. But the hardest part is convincing shareholders to accept variable returns from one year to another: companies are leaving the stock market to free themselves of this dictatorship.
A word about the new KPMG Luxembourg building?
We were talking about positive state of mind: for the first time, the KPMG partners will be the owners of their workplace. Valentini has designed us a wonderful building in the Kirchberg. The first stone has just been laid. It is a symbol of our confidence in the future!