“We have learned the right lessons from the global financial crisis, and the measures taken have worked”, declared FMA Executive Directors Helmut Ettl and Klaus Kumpfmüller in summarising last year’s supervisory activities during the presentation of the FMA’s Annual Report for 2016. “Today, Austria’s financial institutions are on a far more stable footing than they were a few years ago, and they are also significantly more resistant to shocks.” The FMA’s Executive Board in particular backed this up by citing two key figures: the Tier 1 capital ratio of Austrian banks has doubled within less than ten years from 7.5% (2008) to 14.7% (2016). At the end of 2016, Austrian insurance undertakings reported a historically high solvency ratio in accordance with Solvency II of 261%. This means that their reserves are currently more than double the amount of their contractual obligations. The Executive Board illustrated the effectiveness of the preventative measures taken by citing the historic development of the number of cases in which administrative penalties that have been imposed: within the last five years the number has fallen from 531 to 160. “Our policy for supervision of working as preventatively as possible, while on the other hand punishing infringements in a consequent manner, has massively improved market discipline,” remarked Ettl and Kumpfmüller.
Challenges faced in 2016 successfully overcome
In 2016 the FMA, with 380 employees and a financial budget of € 66.7 million, supervised a total of 892 licenced companies, with total assets under management of € 1,307 billion, as well as supervising around 33 million transactions in listed securities over the course of the year. In Austria alone, the licenced companies employ around 121,000 employees, and generate € 15.7 billion in value added per year.
The supervised entities pay approximately 94 % of the FMA’s costs, while the Federal Government makes a lump sum contribution of EUR 4 million. € 6.2 million comes from fees and other income. The FMA collects € 10.5 million for services rendered by the Oesterreichische Nationalbank (OeNB). The banks contribute € 31.0 million (55%), while insurance undertakings contribute € 11.3 million (18%), the Pensionskassen € 1.1 million (2%) and securities supervision € 14.1 million (25%).
The number of employees at the FMA has almost doubled from 200 to 380 since 2005, which the FMA’s Executive Board explained as being a result of the considerable number of new duties conferred upon the FMA by the legislator, citing as examples, combatting of unauthorised business, prospectus supervision, supervision of alternative investment funds, prevention of money laundering, accounting enforcement, supervision of deposit guarantee schemes as well as also being the national resolution authority for banks. This alone has been responsible for more than half of the increased headcount. Furthermore, the Europeanisation of supervision, and the massive consolidation of supervision (the number of pages of legal acts to be monitored has increased sevenfold from 660 to 4,500 pages within the last ten year) has also made increased staffing necessary.
The successful integrated supervision model
“The integrated supervision model has particularly proven itself in overcoming the consequences of the global financial crisis. It is effective, cost-efficient and exploits all synergies in terms of know-how,” commented the FMA’s Executive Board: “In particular an integrated supervisory authority always has the entire financial market in view, and is therefore accordingly able to ensure that there is a ‘level playing field’, with fair conditions for competition over and beyond the borders between the different sectors and industries. In particular, we are in a position to be able to observe all channels of contagion, and therefore to address any potential spill-over effects in advance,” concluded Ettl and Kumpfmüller.
The FMA Annual Report for 2016 can be downloaded here.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-6006
+43/(0)676/882 49 516