Luxembourg’s economic performance is very strong thanks to the dynamic services sector, business-friendly regulations, predictable tax system, sound fiscal policies and openness to global talent. The pace of job creation is strong and benefits not only residents but also cross-border workers and immigrants. The large financial sector is well supervised, but is not exempt from risks. The linkages between domestic banks and international investment funds should continue to be closely monitored. Domestic banks have exposure to high household indebtedness in a context of rising housing prices; this may justify the introduction of additional macro prudential measures.