When presenting the findings of its country inspection for Austria at a press briefing today within the scope of the mandatory Article IV mission , the International Monetary Fund (IMF) stated that the Austrian financial system is set up in a stable, liquid and profitable manner. At the same time, the IMF ’s Head of Mission, Kevin Fletcher, warned that major risks continue to exist such as further escalation of geopolitical tensions, the thread of renewed turbulence in the goods, commodities and energy markets, as well as if the slight economic upturn were to stall, which might lead in the case of banks and institutional investors to significant instances of corporate failures in sectors that are economically susceptible, as well as especially in real estate financing. The IMF therefore advises to maintain the prudent and sustainable regulatory and supervisory policy in the Austrian financial market. The IMF specifically calls for:
- Austrian banks to primarily use their currently high profits to strengthen their capital buffers, and to pursue a prudent and circumspect distribution policy in order to protect against the consequences of negative shocks.
- Sustainable lending standards enacted by the FMA in relation to residential property have paid off, and compared internationally are not strict and are adequately flexible, and should therefore be maintained on a permanent basis as a structural measure.
- Continued close monitoring of the increased risks in relation to commercial real estate financing in light of the sector’s particular significance.
“As regulators and supervisors, we are naturally pleased that the IMF has given Austria’s financial market a good report,” remarked the FMA’s Executive Board members, Helmut Ettl and Eduard Müller: “However, it is even more important for us to implement the IMF ’s recommendations in a consequent manner to protect the stability of the Austrian financial market: by ensuring a prudent distribution policy, guaranteeing the proven standards for the sustainable granting of credit for residential property on a permanent basis, and continuing and further developing thorough risk monitoring in the commercial real estate market.”
Journalists may address further enquiries to:
Klaus Grubelnik
+43 / (0)1 / 24959-6006
+43 / (0)676 / 88 249 516