The Austrian Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB) have again set their thematic priorities for conducting their banking supervision duties for 2024.
The resilience of the banking sector and safeguarding of financial market stability
The capital and liquidity base of Austrian credit institutions will continue to be subjected to intensive monitoring in light of the challenging prevailing environment – in particular the strengthening of the capital base remains the focus of microprudential and macroprudential measures. The impact of inflation and more restrictive monetary policy on interest rate risk and credit risk, the liquidity base and capital base are analysed on both the microprudential level and the macroprudential level.
Real estate risks
Real estate risks (both for residential real estate and commercial real estate) should be further limited in Austria’s banking by means of microprudential and macroprudential measures. The central focus is on the observance of sustainable lending standards as well as the forward-looking forming of risk provisions in conjunction with conservative valuations of collaterals.
Digital transformation and ICT risks – opportunities and threats presented by advances in technology.
Supervisory preparations are under way for the implementation of DORA (Digital Operational Resilience Act). The impact of new technologies, such as the application of artificial intelligence (AI) on business models and the risk situation are also being addressed.
Climate and environmental risks and the resulting transformation of the economy
Sustainability risks, especially, climate and environmental risks should be represented even more strongly in the risk management, strategy and governance of credit institutions. The FMA Guide for Managing Sustainability Risks is intended to be updated, while there will also be a further development of the methodology for the national climate stress test conducted by the OeNB.
Regulation
Austria’s supervisory positions on key legal matters are expected to be incorporated into the European legislative process (e.g. further development of regulations in the area of crisis management) and their transposition into national legislation. Preparations are under way for the enforcement of new regulations (in particular the EU’s banking package and DORA), and the changes required to supervisory practices are being initiated.
Governance
The enforcement of governance requirements towards credit institutions will be strengthened during the transposition into national law of regulations under European Union law, as well as due to even closer cooperation in the area of the prevention of money laundering.
The aforementioned priorities must be considered in conjunction with the Single Supervisory Mechanism’s (SSM) supervisory priorities for 2024 in terms of their content, and are in line with the objectives and the work programme of the European Banking Authority (EBA). The joint priorities for banking supervision are defined and communicated annually for the following year by the OeNB and FMA.
Enquiries should be addressed to:
FMA
Klaus Grubelnik
Tel.: +43-1-24959-6006
[email protected]
www.fma.gv.at
OeNB
Maria-Elisabeth Faulmann
Tel.: +43-1-404 20-6900
[email protected]
www.oenb.at