The Austrian Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB) have once again issued a list of priorities regarding important areas within banking supervision for 2023.
The resilience of the banking sector and safeguarding of financial market stability
The capitalisation of Austrian credit institution’s should be improved further compared with international peers. Where necessary microprudential and macroprudential measures should be taken. Analysis is conducted regularly about the impact of inflation, interest rates and geopolitical tensions on capital, profitability and asset quality. Annual stress tests are conducted to evaluate the resilience of the banking sector.
Standards in relation to the granting of credit
Austrian banks should grant credit based on robust and prudent standards. The implementation and observance of the amended FMA Minimum Standards is monitored and evaluated within the Supervisory Review and Evaluation Process (SREP) as well as in structured dialogues with banks. Compliance with the Regulation for sustainable lending standards in relation to the financing of residential real estate (KIM-V; Kreditinstitute-Immobilienfinanzierungsmaßnahmen-Verordnung) should also be reviewed.
Climate and Environmental Risks
Banks should reflect climate and environmental risks significantly more strongly in their risk management, strategy and governance. The national climate stress test that was conducted by the OeNB for the first time in 2021 should be developed further for ongoing analysis purposes
Digitalisation and ICT risks(Information, Communication & Technology)
Banks’ ICT and security risks should be analysed and treated as appropriate by applying relevant supervisory methodologies. In this regard, there is a particular focus on the impacts on business models and cybersecurity.
Regulation
Supervisory methods, tools and processes should be adapted to new rules and outcomes and applied accordingly. The aim is to contribute actively to European legislation against the backdrop of the Austrian financial market.
Governance
The governance structure in supervised entities, especially ones that stand out from a risk perspective, should by strengthened by means of qualitatively improved fit & proper assessments and tailored governance deep dives.
The aforementioned priorities must be considered in conjunction with the Single Supervisory Mechanism’s (SSM) supervisory priorities for 2023 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
OeNB
Dr. Christian Gutlederer
Tel.: +43-1-404 20-6900