Quarterly CET1 ratio of the banking industry in Luxembourg 2014-2023
The solvency of banks in Luxembourg largely exceeded the minimum requirements in 2023, although the sector's Common Equity Tier 1 (CET1) ratio decreased when compared to the previous year. The CET1 ratio shows how much core capital the bank has versus its outstanding risks. Simply put, it displays how much capital a bank has in reserve in the event their investments go bad. The ratio is an important measure that was introduced in 2014, following the financial crisis, to prevent a future financial crisis. In 2021, the CET1 ratio of banks in Luxembourg was 21.46 percent.