In 2020 the Austrian Financial Market Authority (FMA) and its 385 employees supervised approximately 940 licensed or registered undertakings that collectively manage assets of around € 1.3 trillion. “Austria’s financial sector has managed to address the enormous challenges that have arisen in 2020 as a result of the massive societal and economic fallout of the COVID-19 pandemic, and is on a stable footing. Following great turbulence as a result of the pandemic, the financial markets have also stabilised and have been able to make good the significant losses,” remarked the FMA’s Executive Directors, Helmut Ettl and Eduard Müller, at the presentation of the FMA’s Annual Report 2020, today.
For example, banks have increased their Common Equity Tier 1 capital, despite the difficulties caused by the COVID-19 pandemic, from 15.6% to 16.1%. Banks’ capital base is therefore more than twice as high as it was during the Global Financial Crisis. The volume of non-performing loans (NPLs), namely 1.5% to 2.4% of all loans, also remained at historically low levels. Insurance undertakings currently have an average Solvency Capital Ratio (SCR) of more than 220%, and therefore have more than double the amount of financial means necessary for the fulfilment of their contractual obligations, even in the event of a dramatic deterioration of economic conditions. Investment funds, Pensionskassen and occupational severance and retirement funds have recouped the significant losses causes by stock market turbulence, and closed 2020 with the assets that they manage standing at a new high. Vienna Stock Exchange also recovered from the sudden fall in prices that it sustained, and during the first quarter of 2021 had already returned to its pre-crisis level.
COVID-19: Financial markets are prepared for financing the way out of the crisis
“Decisive political intervention, in passing comprehensive aid and support packages for companies and private households, immediate intervention by central banks, which quickly made sure that sufficient liquidity was made available, as well as the consistent action by regulators and supervisors prevented the contagion arising from the crisis in the real economy spreading into the financial economy,” remarked Ettl and Müller in recapping the past year. “However, this remains and can only be considered as an interim assessment. Substantial challenges continue to lie ahead for all of us.”
In 2021, we will once again need to make a collective effort in order to digest the consequences of the crisis in the real economy, and to to provide strong support to both private households as well as companies, in order to lead them out of the crisis in a sustainable manner,” remarked the FMA’s Executive Board.
Efficient and effective supervision
The FMA’s total budget in 2020 stood at approx. € 72.7 million, of which € 10.7 million were collected as transitory items for the Oesterreichische Nationalbank (OeNB) for the partial reimbursement of the services it provided. € 4.2 million of these costs are covered by a lump-sum from the Federal Government, with € 5.7 million being covered by fees and other income, with the remaining amount being borne on a usage-related basis by the supervised entities. The breakdown of costs is as follows: banks 57.7%; securities supervision 22.7%; insurance undertakings 17.6% and Pensionskassen 2.0%.
During the reporting year, the FMA employed a staff of 385 full-time equivalents, four more than in the previous year. 80% of FMA employees hold a degree, 40% hold an additional qualification such as the professional examinations as lawyers, auditors and tax advisors, or a second or postgraduate degree. Collectively they speak more than 40 foreign languages. The FMA is also a very gender-balanced organisation: 55% of all staff are female and 43% of managerial level staff.
“We are a very attractive employer,” remarked Ettl and Müller, “as all the employee satisfaction ranking lists demonstrate. We attach a great deal of importance to the compatibility of career and family, and therefore place particular value on innovative working time models.” As a fully digital authority, the FMA was also able to profit in this way despite enforced remote working due to the ongoing COVID-19 pandemic.”
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