Austria: Publication of Financial Sector Assessment Program Documentation-Technical Note on Financial Stability Analysis, Stress Testing, and Interconnectedness

March 2, 2020

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Format: Chicago

Austria: Publication of Financial Sector Assessment Program Documentation-Technical Note on Financial Stability Analysis, Stress Testing, and Interconnectedness, (USA: International Monetary Fund, 2020) accessed October 13, 2024

Summary

This technical note on Austria presents the Financial Stability analysis, stress testing, and interconnectedness. Austria’s banking sector presents unique structural vulnerabilities. Private credit growth has supported the cyclical boom without jeopardizing household and corporate indebtedness. Profits of Austrian subsidiaries in Central, Eastern, and South-eastern Europe have increased recently; however, the cycle is turning and the ability of the sector to maintain a solid net interest margin may be further challenged. The Austrian authorities have targeted vulnerabilities related to interconnectedness by imposing Other Systemically Important Institution buffers also at the unconsolidated level. Institutional cooperation arrangements are shown to act as a shock absorber for idiosyncratic shocks, but holdings among participating members of respective IPSs may lead to substantial inward stability risks in a systemic event. Under favorable economic conditions inverse ownership contributes strongly to their capital generation by allowing partial redistribution of profits higher tier banks in the Raiffeisen sector earn on their more profitable international business.

Subject: Asset and liability management, Banking, Commercial banks, Financial institutions, Financial Sector Assessment Program, Financial sector policy and analysis, Liquidity, Solvency stress testing, Stress testing

Keywords: Balance sheet, Bank default, Banks' liquidity profile, Cash flow, Cash-flow liquidity analysis toolkit, Commercial banks, CR, Credit risk, Equity stake, Europe, Fair value, Financial Sector Assessment Program, Financial system, Funding rollover, Global, Interest rate, ISCR, Liquidity, Liquidity profile, OSII bank, Sensitivity analysis, Solvency stress testing, Stress testing

Publication Details

Pages:

92
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2020/066
Stock No:

1AUTEA2020006
ISBN:

9781513535852
ISSN:

1934-7685

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