“The Austrian financial economy continues to face substantial social, political and economic challenges. Despite the multiple crises that it has had to overcome in recent years, it nevertheless remains a stable and crisis-resilient footing,” remarked the FMA’s Executive Directors, Helmut Ettl and Eduard Müller, at today’s presentation of the 2022 FMA Annual Report. The current equity, liquidity and solvency data of the players in the financial economy illustrate this impressively. “We have learned the right lessons from the Global Financial Crisis, and our consistent and stability-focused policy for supervision has proven itself repeatedly in these difficult times,” the Executive Directors stated. Caution is nonetheless urged: “The parallelism of severe geopolitical and global economic uncertainty and high inflation, an abrupt change in interest rates and a significant economic downturn are a dangerous mix requiring the utmost attention. We must continue to strictly observe our policy of stability-focused regulation and supervision.” Ettl and Müller therefore accordingly urged entities to observe a transparent and forward-looking distribution policy. The mantra of regulators and supervisors “after the crisis is before the crisis” is currently more relevant than ever before.
2022: Austria’s financial economy is stable and resilient against crises.
The Austrian financial economy is well-equipped to overcome the challenges it faces. Austrian banks’ Common Equity Tier 1 (CET-1) capital ratio stood at all-time high of 16.3% for the reporting year, and over double the pre-Global Financial Crisis level. Furthermore, the level of non-performing loans (NPL) was also at a historic low of between 1.3% and 1.8% of all borrowing. Insurance undertakings have also managed to come through recent years unscathed, with an average Solvency Capital Ratio (SCR) of around 245%, more than double the level of financial means necessary for the fulfilment of their contractual obligations, even in the event of a dramatic deterioration of economic conditions. In addition, to date around € 1.5 billion has been paid in to the additional interest provision for life insurance prescribed by the FMA in 2013 due to the prevailing low interest environment, thereby also securing guaranteed interest rates in the high interest phase. Geopolitical and global financial volatility observed on stock markets continues to keep asset managers on their toes, with almost all stock indices closing 2022 in negative territory. Extreme volatility still prevails. In addition, during the reporting year the particularly exceptional constellation of both share prices and bond prices falling simultaneously was also observed. Investment funds (-14.2% loss in market value), Pension funds (Pensionskassen) (performance: -9.7%) and corporate provision funds (performance: -7.7%) therefore posted significantly negative results.
“Fit for Future” transformation programme
“As a regulator and supervisor, in addition to our central mandate of preserving the stability of the financial market, we also face a variety of additional and fresh challenges, such as digitalisation, accompanying the transformation of the economic model towards one with great sustainability. new business models as well as new challenges in terms of collective consumer protection. Over the next few years, the EU’s Digital Finance Package will also enter into force, on the one hand addressing the regulation and supervision of cryptoassets, while also strengthening cybersecurity and IT security. The Europeanisation of the operational supervision for the prevention of money laundering will also occur. Life must also be breathed into the new regulatory framework for greater sustainability in the financial sector,” were listed by the FMA Executive Board as examples of future regulatory challenges. In order to address these challenges accordingly, the FMA there initiated modest increases in headcount and budget in 2022, while also launching a transformation programme for the FMA until 2025 under the name “Fit for Future”. It is the most comprehensive reform project in the FMA’s history, and scrutinises the organisation, processes and corporate culture of the FMA with the objective of creating conditions that enable the authority to react quickly to a changing environment and to actively shape the future of the financial market.
Effective and efficient supervision
In 2022, the FMA and its 408 employees supervised 905 licensed or registered undertakings, which collectively manage assets of around € 1,345 billion. The FMA’s total budget in 2022 stood at approx. € 78.4 million, of which € 10.5 million were collected as transitory items for the Oesterreichische Nationalbank (OeNB) for the partial reimbursement of the services that the latter provided. € 5.1 million of these costs are covered by a lump-sum from the Federal Government, with € 7.5 million covered by fees and other income, with the remaining amount being borne on a usage-related basis by supervised entities. The breakdown of costs is as follows: banks 57.1%; securities supervision 23.1%; insurance undertakings 18.3% and Pensionskassen 1.5%.
FMA Annual Reports are available for download on the page FMA Annual Reports.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676 88 249 516