AGEFI Luxembourg - mai 2025

AGEFI Luxembourg 6 Mai 2025 Economie Opinion - By Prof. Bruno COLMANT, Ph.D., Member of the RoyalAcademy of Belgium A mericanneoliberalism, dis- tinct fromAnglo-Saxon cap- italism, is rooted in the market economy and entrepreneur- ship. Everyone faces their destiny, left to the strength of their fists to survive where social protection isweak. The curves of supply anddemand determine everything.A Calvinist essencemarks this country: eachperson seeks sal- vation alone, with charity re- placing thewelfare state. It is a countrywhere raw capitalism reigns, blending suffocation and exaltation. Society is based on the individual, causing a constant clash of ideas and chaos, from which projects emerge in fierce social and economic Darwinism. Those who have lived there know this fragility, far from the apparent solidity of New York's skyscrapers. Everything there is ephemeral, instantaneous, and constantly reinvented. It is a horizontal flow, not a fixedstructure. The countryresembles avast auction room: failure invites retrying, and success invites amplification. However, this logic is evolving: the UnitedStatesisshiftingfromneoliberalismtoexolib- eralism. Everything isdeconstructed, especially social structures, in thenameof a simplification promisingefficiency, prosperity, and freedom, allegedly hindered by others. Globally—as the Secretary of the Treasury recently said—it is about pulverizing the post- warworldorder.Itisseenasanobstacletobridled Americancapitalism,fictitiouslyforcedtocede partofitswealth.Yet,theoppositeistrue: with its reserve currency, the United States, which settles neither debts nor wars, imports what it no longer manufactures. They have shapedcommercialglob- alization of a colonial nature but want to extract themselves from it, accusing the formerly colonized peopleofstealingtheirjobs.Theynowseektovas- salize themin economic and territorial imperialism. DonaldTrumpmanageshis country likea firm, aim- ing for monopoly and price control. And everything willbeshaken,includingcurrencyanddebt.Thedol- lar has dominated since BrettonWoods (1944), guar- anteed by the American military. But today, the United States is withdrawing from conflicts, aban- doning its allies, and conceding zones of influence (China, Russia), which have become commercial rivals. Under DonaldTrump, a prosperous national- ismemerges,weakeningthedollar,whosecredibility faltersforsustainableinvestments.Fromageopolitical perspective, the United States is retreating into itself ina logic of nationalist prosperity, exacerbatedunder Donald Trump. There will inevitably come a time when thedollarwill no longer have a sufficient guar- antor to ensure its timeless credibility, making its use less reliable for long-terminvestments. Moreover, everythingTrumpdoes goes in thisdirec- tion: tariffs, threats to close embassies, likely with- drawal from international organizations like the WHOortheWTO,andperhapsonedaytheIMFand the World Bank. It is known that the United States doesnothaveaforeignpolicybutexportsitsdomestic policy, often chaotic. That is precisely why, from a distance, with the perspective of time, it is impossible not towitness the twilight of the dollar. Moreover, Donald Trump will bring the Federal Reserve under his control. The countless blows against his central bank,whichhepressures to lower interest rates, will soon have no ramparts left but the maintenance of its President. Knowing that, if he is not removed from office, his successor will be at Donald Trump's orders. It will then be a systemic financial shock next to which the subprimes seem like child's play. Indeed, the dollar would depreciate sharply due to negative real interest rates, making the currency less attractive to foreign investors. This would erode its position as the world's reserve currency, a process already initiated by Trump's policies, such as tariffs thatcausedthedollartofallby10%in2025.Acrisisof confidencewouldsetinimmediately,acceleratingde- dollarization. TheUS public debtwould temporarily benefit from low rates, but increased inflation and a depreciatingdollarwouldpush investors todemand higher yields, increasing future borrowing costs. A massive sale of Treasury bonds could trigger a fiscal and financial crisis. With these challenges, Europe fades, especially since its representative structures (Commission and European Council) are not perceived as legitimate, and therefore as valid interlocutors, by Americans who want to reinvent democracy from a nationalist angle. The Franco-German duo fades. Without lead- ership or technology, energy-dependent aging lacks boldness. We are no longer governed but managed, frozen by our contradictions. Awar brushes against us, andwe watch it. According to the Draghi report, we risk fatal failurewithout anambitious publicdebt plan through the ECB. Kissinger said: Americans play chess, aiming for checkmate,whileAsiansplaygo,encirclingtheoppo- nent. The United States will checkmate us without pity. DeGaulle had added, reminding that countries have no friends, only interests, allowing Kissinger to bounce backwithhismemorable sentence: being the enemy of the United States is dangerous, but being their friend is fatal. Trump's demolition of the global order: chaos by design O n Tuesday, 13 May, Deloitte Luxembourg and Elvinger Hoss Prussen, with the support of Financial Times Live, hosted their annual Cross-Border Distribution Conference at the European Convention Center in Luxembourg. This 13th edition focused on identifying new avenues for growth opportunities amid geopolitical challenges. Geopolitical and economic challenges take centre stage A central theme of the conference, intro- ducedbythehostsJustinGriffiths,Partner at Deloitte Luxembourg, and Jérôme Wigny, Partner at ElvingerHoss Prussen, wasnavigatinggeopoliticalinstabilityand its ripple effects with subsequent impact on global markets. Experts examined the impact of neoliberalism, trade wars, and military tensions on European security, transatlantic relationships, and the global economy. Renowned economist Dr. Bruno Colmant delivered a powerful opening keynote, tracing the trajectory of neoliberalism over the past 40 years. He explored its rise to global dominance and eventual unravelling in the faceof today’s fractured economic order, setting a com- pelling tone for the day’s discussions. The panel on geopolitical volatility was moderated by Yuri Bender, from the FinancialTimes.Thethreepanellists,Yves Choueifaty, President and CIO at TOBAM, Anna Rosenberg, Head of Geopolitics at the Amundi Investment Institute, Maximilian Hess, Founder of Ementena Advisory, and Anunita Chandrasekar, Fellow at Centre for European Reform, discussed potential flashpoints and their implications for the Europeanfundindustry,emphasisingthe importance of resilience and adaptability in today’s unpredictable environment, andongoingpolitical tensions. DrJudithArnal,AssociateSeniorResearch Fellow at Centre for European Policy Studies,andDrHolgerSchmieding,Chief Economist at Berenberg, provided valu- ableinsightsonEurope’seconomicfuture. They focused their exchange on policies, productivity,andinvestmentsessentialfor strengthening Europe’s global competi- tiveness amid shifting geopolitical and industrial landscapes. Thediscussionalso evaluatedhowEurope is poised to attract moretalentinlightcurrentglobaldynam- ics. Additional recommendations and measures were presented within the Draghi report on European Competitive- ness, on how to further bolster Europe’s position on the global stage alongside China and theUS. “ As geopolitical developments continue to influence global markets, growth will depend on the industry’s ability to adapt, innovate, and collaborate across borders .” explained Jérôme Wigny, Partner at Elvinger Hoss Prussen and co-host of the conference. “ The 2025 Cross-Border Distribution Conference in Luxembourg is dedicated to helpingassetmanagersandpolicymakersnav- igate these shifts and seize new opportunities for sustainable growth. It is important to us to host this essential forum once again, rein- forcing Luxembourg’s role as a hub for dia- logue, insight, and leadership in cross-border fund distribution .” Highlighting technological innovationand investment strategies One of the key presentations featured Abdulwahhab Abed, CEO of SEDCO Capital, who assessed the growth poten- tial of Shariah-compliant investing and dispelled common misconceptions around its costs and target markets. He emphasizedthatthisinvestmentapproach isnotonlyviable,butalsowell-positioned to lead the future of ethical, liquid, and scalable finance—already representing nearly three trillion dollars and projected to reach eight trillion by the 2030s. The panel further highlighted the increasing interestamongforeigninvestorsinaccess- ing Saudimarkets andproducts. The panel featuring Sandra Daub, Member of the Executive Board of NOUMENA Digital, Sharmil Patwa, Founder of Opus Una Financial Services Consulting, Gaurab Arka Chaudhuri, Group Strategy Director at Barclays, and Stela Willemstein, Group Risk Control Director at UBS AG, explored how Millennial and Gen Z investors—digital nativeswithevolvingexpectationsaround transparency, personalization, and acces- sibility—aredrivingdigitaltransformation in asset management. They underlined theimportanceofbalancingtechnological innovationwith robust securitymeasures to address the challenges posed by AI, blockchain, and robo-advisors, which are notonlytransformingservicedeliverybut also reshaping riskmanagement, compli- ance, and decision-making structures withinfinancial institutions. “ Trust and accessibility are essential for fully harnessing the potential of technological advancementsintheassetmanagementindus- try ,” emphasised Justin Griffiths, Partner at Deloitte Luxembourg. “ As we continue to integrate digital tools and platforms, ensur- ing that investors feel confident in the security andintegrityoftheirtransactionsbecomescru- cial. Cybersecurity is no longer just an opera- tional concern—it is nowcentral to the indus- try’s strategic success and long-term stability. Withoutit,thepromiseofinnovationisunder- mined,andtheabilitytoscalenewtechnologies in a secure, accessible way is compromised. Building this trust will be fundamental as we moveforwardintoamoredigitalandintercon- nected financial landscape.” Navigating regulatory changes andmarket liquidity Mhairi Jackson, Funds and Asset ManagementPolicyManageratFinancial Conduct Authority (FCA), provided a comprehensive analysis of recent and forthcomingUKregulatorydevelopments affecting cross-border fund distribution. She outlined the FCA’s decision tomain- tainalignmentwiththeEUUCITSframe- work in response to industry feedback, whilesignallingashifttowardsregulatory divergence through the ongoing consul- tationtoreformtheUKAIFMregime.The UK’s earlier departure from the ELTIF framework via the creation of long-term assetfunds(LTAFs)wasalsonoted,along- sidenotableprogressinprocessingUCITS applications under the Overseas Funds Regime (OFR). The direction of travel regarding the extension of UK SustainabilityDisclosureRequirementsto OFR-marketedUCITSremainsuncertain, as the current Government may consider a different approach from its predecessor while also noting the EUs intention to reviewthe current SFDR framework. Sanjiv Sawhney, Group Chief Executive Officer at Waystone, expertly moderated discussionaround the roleof open-ended fund structures in increasing liquidity, enhancing access, and fostering global fund distribution. Véronique Fournier, Head of EMEA at Apollo Global Management, Neil Hoyne, Head of International Client Services at Ares Wealth Management Solutions, Bertrand Coste, Partner at Clerville Investment Management, and Tim Boole, Head of Product and Solutions Management at Schroders Capital, explored how Europe can close the gap with the US in private assetdistribution.Fournierstronglyadvo- cated for increased collaboration and strategic partnerships asmeans to foster a more integratedEuropeanmarket. The panel underscored the importance of capitalisingonEurope’srobustregulatory framework,dynamicfinancialecosystem, andrisinginvestordemand.Luxembourg was highlighted as a key player with the potential to become a hub for innovation andcross-bordergrowthinprivateassets. While the panellists recognisedpersistent challenges, suchas regulatorycomplexity and liquidity constraints—they agreed thattheEuropeanprivateassetslandscape offers compelling opportunities for long- terminvestors. EmmaDunkley,fromtheFinancialTimes, moderated a panel featuring Arnaud Gebhart, Head of International ETF Platform at J.P. Morgan Asset Management,MatthieuGuignard,Global Head of Services and Solutions at Amundi,andMarie-SophiePastant,Head of ETF/Index & Systematic Synthetic Strategies Portfolio Management at BNP Paribas Asset Management. The panel reviewed the significant evolution of the Exchanged Traded Funds (ETFs) and the strong growth in activelymanagedETFs, thedriversbehindthegrowthandtherole that ETFs play in composing investment portfolios. Cross-sector insights on collaboration and resilience In a captivating session, Ruth Buscombe- Divey, Formula One Race Strategist, riv- eted the audience with insights from her decade-long career with Ferrari, Alfa Romeo, andHaas. In her keynote, she spoke about leading under pressure, the psychology of deci- sion-makinginhigh-stakesmoments,and how marginal gains and data-driven strategies can make or break a race. She alsoexplainedhowcutting-edgeAI inno- vation, for example “close to the wall”, is being deployed in FormulaOne, empha- sizing its critical role inperformance opti- mization,andpredictiveanalytics,demon- stratinghowthese types of environments arepushing theboundaries ofAI applica- tion in elite motorsport. She continued to explain that human expertise is a indis- pensable part of the ecosystem, one that canmakethedifferencebetweenwinning andlosing.Sheclosedherkeynoteoffered compelling insights into resilience, inno- vation, and teamwork in a sport where everymillisecond counts. In his fireside chat, General Sir Patrick Sanders, former Chief of the UK Army, shared rare insights into Europe’s evolv- ing security landscape amid rising global instability. Drawing on four decades of strategicleadership,heexaminedthelong- termimplicationsofthewarinUkraine— not only for regional stability but for the broader geopolitical order—and empha- sized the escalating threat to Europe’s sovereignty. He underlined the necessity for Europe to adapt, be resilient and act collectively rather than individually, as Member States. He also highlighted the significance of adopting technology and innovation in modern warfare. This dis- cussion provided a timely and thought- provoking perspective on defence, resilience,andinsightsintothecrossroads between security andmarkets. Closing thoughts Asechoedinthesentimentthatadaptabil- ity, rather than strength or intelligence, determines survival, the 2025 Cross- Border Distribution Conference under- scoredtheimportanceofstrategicflexibil- ity in addressing global challenges. Expertsofferedperspectivesonthegeopo- litical landscape, technological innovation in fund distribution, and cross-sector insights on collaboration, fostering dia- logue to pave the way for sustainable growth and resilience in the years ahead. 2025 Cross-Border Distribution Conference: Seizing new opportunities for growth ©Deloitte