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

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

March 2, 2020

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Austria’s banking sector presents unique structural vulnerabilities. The banking sector, counting almost 600 banks at an unconsolidated level, is heavily tiered and clustered. It is characterized by complex ownership structures with inverse ownership whereby small lower tier banks own large higher-tier banks and by institutional cooperation arrangements, including institutional protection schemes (IPS), cross-guarantee schemes, and liquidity associations. These features generate significant financial interlinkages among institutions. Banks’ operating profits are constrained by structurally high cost-to-income ratios, which have remained elevated despite some consolidation over the recent past. Exposure to Central, Eastern, and Southeastern Europe (CESEE) markets remains substantial, although lower than in the past and though CESEE operations have been profitable, interest margins are thin and exposure to the booming real estate sectors in some countries is on the rise, as is in Austria itself.

Series:

Country Report No. 20/66

Subject:

English

Publication Date:

March 2, 2020

ISBN/ISSN:

9781513535852/1934-7685

Stock No:

1AUTEA2020006

Format:

Paper

Pages:

92

Please address any questions about this title to publications@imf.org