The Austrian Financial Market Authority (FMA) is hosting its 13th annual supervisory conference today at the Messe Wien Congress Center on the general topic of “Financial Markets in Changing Times”. 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. Climate change, the Covid-19 pandemic, Russia’s war of aggression in Ukraine – exogenous shocks have a massive impact on the economy and society as well as the financial sector. Global economic relationships are being restructured. Supply chain gaps, shortages in terms of materials, commodities and energy, exploding prices, and increasing living costs are feeding the fears of recession, while high inflation proves a challenge for monetary policy and has forced a change in interest rate policy. Disruptions to technological systems, such as digital transformation or profound social developments like the transformation of vital and economic models towards greater sustainability are necessitating novel approaches to thinking and finding solutions. These are developments that will also fundamentally change the financial markets, and questions to which the financial sector must also find answers. They are part of the wide range of topics to be discussed broadly and in depth at the FMA’s Supervisory Conference.
In addition to the FMA’s Executive Board Members, Helmut Ettl and Eduard Müller, Verena Ross, Chair of the European Securities and Markets Authority (ESMA), and Andrea Enria, Chair of European Banking Supervision at the ECB (SSM), will also provide impulses for discussion. The Vice Governor of the OeNB, Gottfried Haber, will analysis the “Economic Development of the Financial Market” and Austria’s Minister of Finance, Magnus Brunner, will elaborate on the government’s political accents regarding Austria’s financial market.
FMA Executive Board: financial market reforms have proven their worth in the crisis
In their introductory statement, the FMA’s Executive Directors, Helmut Ettl and Eduard Müller, warned that the economic impact of Russia attacking Ukraine has darkened the economic horizon, “the warning flags are being raised everywhere about impending economic storms.” Energy and commodities shortages, vulnerable supply chains, high inflation and tightening of monetary policy have has put massive forecasts on growth forecasts, with talk already in some quarters about the threat of recession or unpredictable stagflation. “The situation in the real economy is, in any case, very fragile,” remarked the FMA’s Executive Directors. On the other hand, the Austrian financial market “remains very robust, with Austria’s financial services providers remaining stable and resilient to crises.” It is now a matter of ensuring as far as possible, that any infection of the financial sector from the turbulence in the real economy is contained by means of coordinated action and intensive exchange between politicians, central banks and financial market supervisors. “We must do our utmost, as in the Covid-19 crisis, to ensure that the financial sector does not become part of the problem, but instead forms part of the solution,” highlighted Ettl and Müller. A cautious and prudent dividend policy is in any case a prerequisite for this. The lessons learned from the Global Financial Crisis in any case proved their worth in the Covid-19 crisis; these lessons included the Europeanisation of supervision, the closing of regulatory gaps, the strengthening of the capital base, the creation of an efficient and effective recovery and resolution regime. Now it is once again the financial sector’s role to provide powerful support and protection for companies and households in these difficult times. In addition to geopolitical and economic challenges, structural challenges to contend with should not be overlooked, such as the struggle against climate change by transforming the economy towards one with greater sustainability as well as the technological upheavals caused by digital transformation.
Conference survey: geopolitical risks are the dominant issue
The traditional survey conducted among the participants at the conference regarding the greatest risks and challenges for the financial markets this year yielded a different order of priorities. While the low interest environment, along with fears of a government debt crisis as well as operational risks like IT and cyber threats and money laundering have dominated in recent years in the list of the greatest challenges facing the financial sector, worsening geopolitical risks head the rankings with 64% this year. The battle against climate change and towards greater sustainability, in contrast, continues to play a minor role, as does the threat of a property price bubble.
The FMA’s Executive Directors, Helmut Ettl and Eduard Müller, commented, “There are many indications of a storm brewing, with challenging times ahead,” before concluding on a positive note, “However, with transparency, open dialogue and determined coordinated action we will master these challenges together!”
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson):
+43/(0)1/24959-5106 or +43/(0)676/882 49 516