Luxembourg has experienced a severe recession, as its international links exposed it to the financial crisis and the steep fall in world trade. The very open financial and industrial sectors contracted sharply. The financial impact of the crisis has been primarily on internationally-oriented banking and fund management activities. However, there is little evidence of serious credit constraints facing the domestic economy. Luxembourg participated in the cross-border rescue of two financial institutions with extensive local activities, though their local subsidiaries were not at the origin of the problems.