The FMA’s Executive Directors, Klaus Kumpfmüller and Helmut Ettl, highlighted the benefits of the integrated approach in regulation and supervision at the 9th FMA Supervisory Conference, held today on the general topic of “The Financial Market as a Global Village: integrated, innovative and international”. “The digitalisation of the financial markets allows an ever greater blurring of boundaries between products and sectors, with their globalisation demanding intensive international supervisory cooperation and on a national level know-how and information is best bundled together in the form of an integrated supervisory authority”, remarked Kumpfmüller. Only so is it possible to apply the principles of subsidiarity and proportionality and a risk-based approach to regulation and supervision in a consistent manner across the board, and to ensure a “level playing field”, to ensure fair competitive conditions within the Austrian market. His fellow Executive Director, Helmut Ettl, urged the closing of gaps in regulation that continue to exist, in particular in relation to the cryptoeconomy and the shadow financial economy: “Anything that operates like a financial instrument must also be regulated and supervised like a financial instrument. We do not require new regulations to do this, but instead must incorporate these non-regulated areas into existing regulations.”
Thinking globally and having the courage to act nationally
“Regulators and supervisors are required to act anticyclically”, Kumpfmüller warned regarding the debate on deregulation that has re-erupted as a result of strong economic growth. In particular the Global Financial Crisis of recent years has dramatically demonstrated what a blind craze towards deregulation can lead to. However, he pleaded for the evaluation and reviewing of existing regulations to check whether they actually achieve their aims, or whether approaches exist to achieve such aims more efficiently and effectively. With regard to the globalisation of financial markets, while uniform international regulations are preferable, it should not be necessary to have to wait for too long for them, instead it is also necessary to have the courage as applicable to make advances using national regulations.
Warning of the first signs of a crisis
Ten years after the collapse of Lehman Bros., which triggered a Global Financial Crisis, Ettl notes that the right lessons have been learned and implemented. However, he also warned strongly against believing that there could never be another crisis in the future. “On the contrary,” remarked Ettl, “we are already seeing the first warning signs.” As specific examples he named asset price bubbles in some real estate markets, on stock exchanges as well as in the cryptoeconomy. “Danger zones like ‘too-big-to-fail’, the shadowing banking system, new cyber risks as well as the public debt of some countries within the euro area continue not to have been adequately addressed”. The crisis of multilateralism is also a cause for concern, since in the global village international cooperation is of eminent importance.
“We understand that our supervisory conference, our open discussion of current issues and our continuous dialogue with the financial economy makes a significant contribution towards addressing these open issues, and for discussing answers and approaches to find solutions together”, Ettl and Kumpfmüller remarked in harmony.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0)676/882 49 516