Clearstream is indicative of how the sector has adopted a flexible approach When people think of Luxembourg, they usually think of banks. But interestingly, steel used to be its most important industry. 'The steel industry represented a high percentage of GDP,' said Philippe Metoudi, Clearstream Banking director, relationship management for Asia-Pacific/Middle East/Africa. 'In the 1960s, the government decided to diversify. It understood we needed something else. So decided to strengthen the banking sector.' All the world's major banks are represented in the duchy, including HSBC. There are many reasons, but one of the most important is its bank-friendly policies. 'Luxembourg has a very good management collateral low [policy]. In many countries it's unclear what you can do with collateral. In Luxembourg, you can liquidate it,' Mr Metoudi said. If Luxembourg is a great place to do business, one of the key reasons is its central location. 'The airport is only 10 to 15 minutes from the city. Paris, London, Frankfurt, Zurich - many of the major European cities are less than an hour's flight away,' Mr Metoudi said. But there are other reasons as well. 'We have a very business-minded government. It is very small and flexible. Things happen very quickly. Remember that Luxembourg is stuck between two giants, France and Germany,' Mr Metoudi said. Asia-Pacific has been the company's best-performing region for the past 10 years. 'I fly every week without exception and every time I land in Hong Kong I bless this place because it has been a great place for me and a great place for the company,' Mr Metoudi said. Hong Kong and Luxembourg have many things in common. 'Hong Kong is the centre of Asia and Luxembourg is the centre of Europe,' Mr Metoudi said. 'Both places are small, they are active, and things happen quickly. Both are also very international.' When the company decided to set up an office in Asia, Hong Kong was chosen for two reasons. First, it is the best gateway to China. Second, it is a great place to be in terms of logistics. 'I can fly to Beijing [from Hong Kong] in the morning, have a meeting and return in the evening, You can do the same with Singapore and other cities in Asia.' Clearstream Banking is what Mr Metoudi calls a bank's bank. All of its customers are banks, central banks, or brokerage dealers. The company is relatively small, with 1,000 employees in Luxembourg and another 400 in offices around the world, including Frankfurt, London and New York. Hong Kong is the hub for the Asia-Pacific region, the Middle East and Africa. An office in Dubai, which handles the Middle East and Africa, reports to the Hong Kong office. 'On a busy day we can clear one million transactions,' Mr Metoudi said. The local office is highly international, with staff from Hong Kong, Singapore, Japan and South Korea. Most were educated in the United States, Britain or elsewhere in Europe. And most are multilingual. 'The team handles 10,000 phone calls per month in 10 different languages. All of our computers are linked to our head office in Luxembourg, [giving them direct access] to all of the information there in real time.'