The International Monetary Fund (IMF) considers the Austrian financial system to be particularly resilient against shocks and has given Austria a positive report both as a financial centre and in terms of supervision. The regulatory framework, also for resolution and crisis management, has been classified as being very comprehensive and significant progress has been made in the combating of money laundering and terrorist financing. Macroprudential supervision is assessed as being very effective and adequate. These findings emerge from the IMF report about the comprehensive country inspection conducted in 2019 of the Austrian financial sector as part of the Financial Sector Assessment Program (FSAP). It evaluates the material risks for financial market stability; the legal, regulatory and institutional framework, as well as the capacities of national institutions to withstand a financial crisis. In particular, stress tests conducted by the IMF together with the OeNB have confirmed the stability of the banking system.
The IMF’s comprehensive recommendations
Although macroprudential measures have reduced risks to financial market stability, structural risks, such as the strong interdependencies of the Austrian financial system, specific ownership structures as well as the dependency on the profitability of business activities in Eastern Europe continue to prove challenging. The IMF therefore proposes to closely monitor group-wide risks, financial interdependencies as well as banks’ non-sustainable business models, and for the supervisor to address them in a consistent manner. Furthermore, the IMF also warns about the necessity to analysis and eliminate gaps in data in the real estate and corporate sectors. It also recommends to pay greater consideration to the increasing systemic risks in the residential property sector.
Stress tests should in the future better reflect contagion and second-round effects, and should use multiple scenarios as well as affording greater consideration to regional results.
In the “Financial Sector Assessment Program” (FSAP) the IMF has hitherto subjected countries with globally significant financial markets – Austria is also classified as one – to an intensive analysis and inspection every five years. Changes to the intervals between inspections are also being discussed as part the IMF’s internal review of its FSAP Guidelines,.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA)
Tel.: +43/(0)1/24959-6006, or +43/(0)676/88 249 516
Dr. Christian Gutlederer (OeNB)
Tel.: +43 / (0)1 / 404 20- 6900