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What is the BCL and what are its tasks ?

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The Banque centrale du Luxembourg (BCL) is the monetary authority of Luxembourg and a member of the Eurosystem and the European System of Central Banks. It was established on 1 June 1998 in accordance with the provisions of the law of 22 April 1998. The BCL is currently governed by its Organic Law of 23 December 1998, as amended several times.

The BCL is charged with several tasks.

The main task of the BCL consists in its participation in the execution of the tasks of the ESCB (The European System of Central Banks) which are:

  • The definition and implementation of monetary policy in the euro area;
  • The conduct of foreign exchange operations;
  • The holding and management of official foreign reserves of the countries of the euro area;
  • The promotion of the smooth operation of payment systems.

The BCL also provides services to the public, the financial center and the entire national economy:

  • The BCL issues and puts banknotes into circulation, and also produces and brings coins into circulation on behalf of the Treasury (which issues them);
  • The BCL conducts study and research activities which allow, on the one hand, for the preparation of monetary policy decisions and, on the other hand, for the development of a specialised knowledge with regard to monetary, financial and economic issues;
  • The BCL collects, compiles and analyses a wide range of monetary, banking and financial statistics;
  • The BCL operates TARGET2-LU, Luxembourg's component of TARGET2, the euro area’s real-time gross settlement system, which is mainly used for the settlement of monetary policy operations of the euro area;
  • The BCL supervises the functioning of the payment and securities settlement systems;
  • The BCL manages financial assets for its own accounts or on behalf of third parties;
  • The BCL is responsible for supervising the general situation of liquidity and the individual situation of liquidity of each operator. It also contributes to European financial and banking supervision;
  • The BCL has an advisory role vis-à-vis political and legal authorities in its fields of competence;
  • The BCL publishes studies and research projects, promotes research and third-level education and also provides general information on its mandate and tasks to the wider public.