In an increasingly complicated and internationally networked financial market it no longer suffices for banks and supervisors to focus on classical solvency-based risk – such as credit risks. The Executive Directors of the Austrian Financial Market Authority (FMA), Helmut Ettl and Klaus Kumpfmüller strongly emphasised this fact during the FMA’s 3rd Practice Workshop on Compliance and Prevention of Money Laundering, at which around 400 experts from the Austrian financial industry are participating. Shortcomings in Compliance and the Prevention of Money Laundering of Institutions has created costs running into the hundreds of billions in the European banking sector, and has weakened the sector as a whole. In addition the massive money laundering scandals of the past twelve months have also rocked the European banking sector. Several banks have had their licences withdrawn for negligent and systematic deficiencies in the prevention of money laundering.
Such events have endorsed the FMA’s approach of constantly developing integrated conduct supervision for financial products and the prevention of money laundering and terrorist financing. “The FMA has maintained an absolute zero-tolerance policy in relation to money laundering and terrorist financing in the financial market for many years. We set, communicate about and inspect high standards, and consistently punish in cases where such standards are not observed. The awareness for the prevention of money laundering in the Austrian financial market has improved decisively,“ commented FMA Executive Director Helmut Ettl. The FMA considers itself as a pioneer in the European framework, added fellow Executive Director Klaus Kumpfmüller: “As an integrated supervisory authority, we have a seamless flow of information. The prevention of money laundering is an integral component of financial market supervision. At European level work is currently being conducted to reach the same level. Our expertise is in strong demand.”
The FMA has also expanded its integrated supervisory approach for the conduct supervision for financial products. This year the supervision of conduct of all financial products by banks has been consolidated into a dedicated division. Regardless of the type of financial product that customers request at a bank – be it securities, a fund-based savings plan, a life insurance policy or a mortgage – customers must be able to rely on enjoying comparably high standards in relation to customer advice and product transparency.
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