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%.
Keywords: Europe, Austria, Croatia, Banking, Insurance, Article IV, FSSA, FSAP, Macro-Prudential Policy, Resolution Framework, Systemic Risk, Stress Testing, CAR, IMF
Previous ArticleNBB Launches Insurance Stress Test for 2020
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.