Featured Product

    IMF Reports Assess Financial Sectors in Austria and Croatia

    March 02, 2020

    IMF published a report on results of the Financial System Stability Assessment (FSSA) for Austria, along with several technical notes under the Financial Sector Assessment Program (FSAP) on Austria. The technical notes cover the topics of financial stability analysis, stress testing, and interconnectedness; banking oversight; macro-prudential policy framework and tools; bank resolution and crisis management; anti-money laundering and combating the financing of terrorism; and regulation, supervision, recovery, and resolution regime prospects of the insurance sector. Also published was a staff report under the 2019 Article IV consultation with Republic of Croatia.

    The FSSA report on Austria highlights that authorities have proactively strengthened the financial stability framework since the previous FSAP. The IMF Executive Directors agreed with the thrust of the findings and recommendations of the 2019 assessment. The macro-prudential policy framework has been strengthened and the banks are, in aggregate, well-capitalized and resilient to severe macro-financial shocks. The regulatory framework has been amended to address some of the 2013 FSAP recommendations. Directors noted that, while a robust regulatory framework and prudential policy actions have lowered financial stability risks, challenges include interconnectedness, data and regulatory gaps, resource constraints, exposure to cross-border and money-laundering risks, and recent developments in the real estate sector. To maintain the stability and efficiency of the financial system, Directors called for enhanced monitoring of intra-group transactions and spillover risks.

    Additionally, the assessment on Austria shows that accurate calibration of prudential buffers and enhancement of data collection would help in timely identification of emerging risks, in particular from real estate and non-financial corporate sectors. Directors underscored the need to continue enhancing the resolution framework for banks and insurance companies, ensuring that resolution strategies are effective to contain spillover risks and that efficient information-sharing and cross-border cooperation arrangements are in place. They noted plan of the authorities to abandon the institutional reforms in banking oversight. Close collaboration between national and European bodies in the context of the resolution framework will also be helpful. Directors noted that the scope of the annual contingency testing program should be expanded to include amplification channels and encouraged the authorities to ensure funding in resolution.

    The staff report on Croatia highlights that the banking system, on the whole, remains profitable, liquid, and well-capitalized, but is subject to lingering uncertainties. Non-performing loans (NPLs) have further declined, mainly due to NPL sales. The Croatian National Bank (CNB) is monitoring deposit concentration and interest rate risk, as low rates on savings deposits is increasing the share of demand deposits. Also, the average capital base remains strong, with a capital adequacy ratio of 22.7%. 

     

    Related Links

    Keywords: Europe, Austria, Croatia, Banking, Insurance, Article IV, FSSA, FSAP, Macro-Prudential Policy, Resolution Framework, Systemic Risk, Stress Testing, CAR, IMF

    Featured Experts
    Related Articles
    News

    EBA Updates List of Validation Rules for Reporting by Banks

    EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.

    September 10, 2020 WebPage Regulatory News
    News

    EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework

    EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).

    September 10, 2020 WebPage Regulatory News
    News

    NGFS Advocates Environmental Risk Analysis for Financial Sector

    NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.

    September 10, 2020 WebPage Regulatory News
    News

    MAS Issues Guidelines to Promote Senior Management Accountability

    MAS published the guidelines on individual accountability and conduct at financial institutions.

    September 10, 2020 WebPage Regulatory News
    News

    APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans

    APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.

    September 09, 2020 WebPage Regulatory News
    News

    SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks

    SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.

    September 09, 2020 WebPage Regulatory News
    News

    FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms

    FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.

    September 09, 2020 WebPage Regulatory News
    News

    ECB Updates List of Supervised Entities in EU in September 2020

    ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.

    September 08, 2020 WebPage Regulatory News
    News

    OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management

    OSFI published the key findings of a study on third-party risk management.

    September 08, 2020 WebPage Regulatory News
    News

    FSB Extends Implementation Timeline for Framework on SFTs

    FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.

    September 07, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5796