The Austrian Financial Market Authority (FMA) is holding its 12th annual Supervisory Conference today at the Austria Center Vienna on “Sustainable ways out of the crisis”. Leading figures from politics and finance, regulation and supervision, academia and research are discussing the challenges and threats to the financial markets with an audience of over 600. The spectrum of issues under discussion ranges from the impact of the COVID-19 crisis on the financial markets, the contribution of digitalisation and green finance to the way out of the crisis, as well as what governance and AML have to look out for in light of the dynamic developments, and how to manage the dilemma of security and returns in the prevailing low interest environment. Frank Elderson, Member of the Governing Board of the European Central Bank (ECB) and Vice Chair of Banking Supervision (SSM), Petra Hielkema, Chairperson of the European Insurance and Occupational Pensions Authority (EIOPA), and Natasha Cazenave, Executive Director of the European Securities and Markets Authority (ESMA) and the FMA’s Executive Board members Helmut Ettl and Eduard Müller will all be providing impulses for discussion. The conference will be rounded off by the Governor of the Oesterreichische Nationalbank (OeNB), Robert Holzmann, who will analyse the “Economic Developments in the Financial Market”.
FMA Executive Board: financial market reforms have proven their worth in the crisis
“To date Austrian financial services providers have come through the COVID-19 crisis well, and despite the massive challenges they have faced have been able to make a significant contribution to support the real economy, private households, and enterprises during these difficult times,” the FMA’s Executive Board members, Helmut Ettl and Eduard Müller, noted in their opening remarks. There are three significant reasons for this: “The right lessons were learned from the Global Financial Crisis of 2008, regulation and supervision have been europeanised, and efficiency and effectiveness improved by closing gaps. Austria’s financial services providers have done their homework, have strengthen their capital base massively, and have also addressed the consequences of the past in a consistent manner. The public sector has also provided private households and enterprises during the crisis with an unprecedented level of financial support, thereby also indirectly protecting financial services providers.”
The FMA Executive Directors cite the fact that banks entered the COVID-19 pandemic with approx. 16% Common Equity Tier 1 (CET1) capital – more than double the amount held prior to the Global Financial Crisis – and that they have been able to maintain this level to date despite the massive challenges presented. The situation is similar for non-performing loans (NPLs), which have maintained a historically low level of approx. 2% despite the prevailing COVID-19 pandemic. The solvency of insurance undertakings also remains stable at over 220%.
However, Ettl and Müller also warn: “Vaccinations have proven to be the decisive step towards the return to normality, and the economy has recovered more quickly and strongly to date than was expected. However, we are not yet out of the woods: neither in terms of infection rates, nor in terms of the economic upturn. There is still a lot to do.” They therefore urged Austria’s financial economy to seize the opportunities provided by the NextGeneration EU European investment programme, which in conjunction with the medium-term financial framework will mobilise more than € 2 trillion over the next six years. “The target must be to emerge from the pandemic in a strong position, while also making the financial economy and financial markets greener, more digitalised and more crisis-resistant,” the FMA’s Executive Directors remarked.
Conference Survey: sustainability is seen as an opportunity rather than a threat
A survey of conference participants showed that there is not yet a particularly high level of awareness of sustainability risks in the Austrian Financial Market. The prevailing low interest environment as well as operational risks such as conduct risk, legal risk or the risk of money laundering, as well as the threat of a real estate bubble are all seen as much larger challenges for financial market participants. In contrast, sustainability risks only play a secondary role. Conference participants however agreed that the financial sector might be expected to make a large contribution towards addressing the climate crisis.
“Clearly, we all still have a lot of work to do in raising awareness about sustainability, both in terms of the challenges of climate change and those of digitalisation and sustainable governance,” remarked the FMA’s Executive Board Members, Helmut Ettl and Eduard Müller.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0)676/882 49 516