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The Financial System of Liechtenstein

A Highly Concentrated Banking Sector

As of 2006, the financial system of Liechtenstein was characterized by a highly concentrated banking sector. Here are some key statistics:

Key Facts About the Banking Sector

• There are 16 banks in Liechtenstein, all of which are controlled by domestic investors.
• The three largest banks account for:
  • 90% of total balance sheet assets
  • 86% of assets under management
  • 89% of operating profits
  • 63% of employment in the banking sector
• Two of the three largest banks are publicly quoted on the Swiss Stock Exchange.

Securities Activities

Securities-related activity in Liechtenstein is primarily focused on asset management for high-net-worth individuals. Here are some key facts:

Key Facts About Securities Activities

• The majority of clients are located outside of Liechtenstein, with the largest number being in European jurisdictions.
• All banks offer brokerage services to retail investors, including the sale of investment funds and securities.

Investment Funds Industry

The investment funds industry in Liechtenstein is growing rapidly. Here are some key statistics:

Key Facts About the Investment Funds Industry

• There are 28 licensed fund management and investment companies
• There are 208 investment funds with a total of CHF 26.6 billion assets under management as of December 31, 2006.
• The licensing of asset managers under the Asset Management Act is still underway, with 48 licensed asset managers managing an estimated CHF 11.2 billion.

Insurance Sector

The insurance sector in Liechtenstein is regulated by the Law on the Supervision of Insurance Undertakings (Insurance Supervision Law) of 1995 and other laws. Here are some key facts:

Key Facts About the Insurance Sector

• There are 35 insurance companies in Liechtenstein, of which:
  • 17 are life companies
  • 13 are non-life companies
  • 5 are reinsurance companies
• Most of the Liechtenstein life companies are wholly owned subsidiaries of well-known, internationally active insurance companies or banks. Only two insurance companies are locally-owned.

Key Statistics

Here is a table showing the structure of the financial system in Liechtenstein from 2002 to 2006:

The financial system of Liechtenstein is characterized by a highly concentrated banking sector, a growing securities activities sector, and a small but increasing insurance sector.