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The solvency of banks in Luxembourg largely exceeded the minimum requirements in 2024, 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 the fourth quarter of 2024, the CET1 ratio of banks in Luxembourg was 17.9 percent.