The International Monetary Fund (IMF) has published its latest report on the stability of the Austrian financial system. The report is the result of the Financial Sector Assessment Program (FSAP) assessment. The FSAP is a comprehensive international assessment about the stability and resilience of a financial system.<\/p>
The IMF has reached a positive conclusion: overall, the Austrian financial system is robust and resilient. Despite the challenging economic environment, the banking sector remains well capitalised, profitable and liquid.<\/p>
The stress tests that were conducted during the assessment confirm the banking system’s resilience. Capital ratios remain above the required regulatory requirements even under severe yet plausible crisis scenarios. Furthermore, institutions have high liquidity coverage buffers and are also able to withstand significant liquidity outflows.<\/p>
The IMF commends the Austrian Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB)’s supervisory strategy. It positively highlights the supervisor’s use of available resources in a manner than targets significant risks. In addition, the report also confirms the further development of the FMA’s risk-based approach to supervision.<\/p>
In the area of residential property, the IMF determines that the Regulation on Real Estate Financing Measures in Credit Institutions (KIM-V; Kreditinstitute-Immobilienfinanzierungsmaßnahmen-Verordnung) has reduced credit risk effectively. Funding of commercial real estate, however, remains a material risk. The IMF therefore highlights the importance of continuing close monitoring of this sector.<\/p>