COVID-19 presents massive challenges for all financial market participants – including the supervisory authority. The FMA constantly posts information on this page about the measures taken by European institutions as well as the FMA in light of the most recent developments in relation to the COVID-19 virus.
The FMA is adapting supervisory practices and its measures during the Corona crisis in accordance with the European supervisory authorities and regulators
“The existing set of regulations permit a high degree of supervisory flexibility, which we make full use of”, the FMA’s Executive Directors, Helmut Ettl and Eduard Müller explain: “We are lessening the burden for the banks, where doing so is possible without damaging financial stability. However, it is just as important to identify risks in an orderly manner during the crisis, and only by doing so are we able to collect, analyse and manage such risks in an orderly manner in risk management.”
The FMA has made active contributions to the appropriate recommendations of EU regulatory and supervisory instances, supports them to the letter and consistently implements them in its supervisory practices.
The measures taken by the supervisor in relation to the Corona pandemic are of a preventive nature and serve to provide affected undertakings with the necessary flexibility in this situation, and to allow them to be able to focus on the operational maintaining of their business operations and to grant loans to the real economy.
Furthermore, the supervisor’s measures support government programmes to mitigate the economic fallout of the Corona crisis, that have been initiated in a display of national solidarity.
“Our measures assist the fiscal assistance programmes and we are making our contribution to allow them to be implemented in an efficient and effective manner in the financial market and to take effect quickly – on a continuing basis and depending on how the situation develops,” remark Ettl and Müller.
Summary of the key points about supervisory flexibility and relief
- Debtors in arrears are not automatically to be classified as being in default, in the case of the repayment of capital and interest having been suspended as a result of the Coronavirus.
- In relation to the Disclosure of financial circumstances when being granted credit it has been clarified that for the purpose of the creditworthiness assessment it is adequate to analyse the most recent available annual financial statement for 2018, in the event that the annual financial statement for 2019 is not yet available.
- Institutions may apply a past full-year liquidity observation for the borrower for theassessment of the ability to service the loan.
- Distribution of dividends, bonuses and share buy-backs: The supervisor has issued a large number of measures, with the help of which the scope for granting of credit and as applicable for the absorption of loss has been increased. Against this background and in light of the high level of uncertainty in regard to further developments, the FMA recommends refraining from share buy-backs as well as to consider the distribution of dividends, profits and boni with particular care.
Update 26.07.2021: Supervisory Expectation on distibution of dividends, share buybacks and variable remuneration: the financial supervisor continues to demand prudent and forward-looking capital planning on the part of financial service providers when considering dividend distributions, share buybacks and variable remuneration. In particular, financial service providers should give careful consideration to the sustainability of their business model and an increased credit risk that could arise from additional losses once government support measures cease to apply. (See press release of 23 July 2021).
- Furthermore, the FMA recommends banks to apply the transitional rules for the IFRS9 accounting standards. Banks should increasing apply a medium-term perspective. In the case of delayed payments as a rule of Corona, a “through the cycle” perspective should be taken, which also takes into consideration the government measures for mitigating economic consequences.
- To the Statement on the EBA Website
The FMA and the Oesterreichische Nationalbank are implementing these recommendations quickly and consistently together with Austrian banks, in order to be able to support private households and companies in the best possible way during the crisis.
The FMA has published the detailed information and FAQs below – both issued by the FMA itself as well as by the ECB, EBA, EIOPA and ESMA – on various COVID-19 issues and which are regularly updated and extended.
Answers can be found here to the most frequently asked questions from consumers in relation to the Coronavirus.
FMA Regulations issued/amended in relation to the COVID-19 crisis
Information from the European financial market supervisory authorities
Current information from the European financial market supervisory authorities can be found below.
An overview can be found below about the relevant documents which have been published by the European Central Bank (ECB) and the European Banking Authority (EBA).
In addition, the European Central Bank also publishes all information in relation to it COVID-19 measures on its website.
Insurance Undertakings and Pension Companies
An overview can be found below about the documents published by the European Insurance and Occupational Pensions Authority (EIOPA) in relation to COVID-19 measures.
Stock Exchanges and Markets
An overview can be found below about the documents published by the European Securities and Markets Authority(ESMA).