{
  "title": "Austria: Financial System Stability Assessment-Press Release; Staff Report; and Statement by the Executive Director for Austria",
  "publication": "IMF Staff Country Reports, February 3, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2020/01/31/austria-financial-stability-assessment-press-release-staff-report-and-statement-by-the-49010",
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  "summary": "This paper presents Austria’s 2019 Financial System Stability Assessment. The Austrian authorities have proactively strengthened the financial stability framework since the previous Financial Sector Assessment Program (FSAP).",
  "sections": [
    {
      "heading": "Summary of assessment",
      "content": "- Presents Austria’s 2019 Financial System Stability Assessment.\n- Austrian authorities have proactively strengthened the financial stability framework since the previous Financial Sector Assessment Program (FSAP).\n- FSAP analysis suggests that banks, in aggregate, are resilient to severe macrofinancial shocks, although most banks would make use of capital conservation buffers.\n- Mutual financial cooperation arrangements among banks act as a shock absorber for idiosyncratic shocks, but high financial interlinkages may fuel loss propagation in a systemic event.\n- Robust regulatory framework and prudential policy actions have lowered financial stability risks, but notable challenges remain."
    },
    {
      "heading": "Risks and vulnerabilities",
      "content": "- High interconnectedness across financial institutions increases potential for loss propagation in systemic events.\n- Exposure to cross-border risks and money-laundering risks is highlighted as a continuing vulnerability.\n- Resource constraints, data and regulatory gaps constrain effective oversight and risk monitoring."
    },
    {
      "heading": "Stress testing and resilience",
      "content": "- Banks are generally resilient to severe macrofinancial shocks at the aggregate level.\n- Most banks would rely on capital conservation buffers under severe stress scenarios.\n- Recommendation to enhance the stress testing framework to consider second round effects and contagion."
    },
    {
      "heading": "Data, supervision, and regulatory gaps",
      "content": "- Identified gaps in data collection on:\n  - foreign exposures,\n  - nonfinancial corporates,\n  - real estate.\n- Need to strengthen supervision of related party, group-wide, and money-laundering risks.\n- Supervisors should be enabled to take timely action to correct unsustainable risk taking, including unsustainable lending and business models.\n- Authorities should enhance monitoring and oversight related to contagion/spill over risks."
    },
    {
      "heading": "Policy recommendations (enumerated)",
      "content": "- Enhance the stress testing framework to explicitly consider:\n  - second round effects,\n  - contagion across institutions.\n- Improve data collection on:\n  - foreign exposures,\n  - nonfinancial corporates,\n  - real estate.\n- Strengthen supervision of:\n  - related party risks,\n  - group-wide risks,\n  - money-laundering risks.\n- Ensure supervisors have capacity and tools to take timely corrective action against unsustainable lending and business models.\n- Enhance monitoring and oversight related to contagion and spillover risks.\n\n---\n\n Content in this bundle\n\n- 1autea2020001 - Executive Summary\n  - 1autea2020001 - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1autea2020001 - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: February 3, 2020",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781513528786.002",
    "Presents Austria’s 2019 Financial System Stability Assessment.",
    "Austrian authorities have proactively strengthened the financial stability framework since the previous Financial Sector Assessment Program (FSAP).",
    "FSAP analysis suggests that banks, in aggregate, are resilient to severe macrofinancial shocks, although most banks would make use of capital conservation buffers.",
    "Mutual financial cooperation arrangements among banks act as a shock absorber for idiosyncratic shocks, but high financial interlinkages may fuel loss propagation in a systemic event.",
    "Robust regulatory framework and prudential policy actions have lowered financial stability risks, but notable challenges remain.",
    "High interconnectedness across financial institutions increases potential for loss propagation in systemic events.",
    "Exposure to cross-border risks and money-laundering risks is highlighted as a continuing vulnerability.",
    "Resource constraints, data and regulatory gaps constrain effective oversight and risk monitoring.",
    "Banks are generally resilient to severe macrofinancial shocks at the aggregate level.",
    "Most banks would rely on capital conservation buffers under severe stress scenarios.",
    "Recommendation to enhance the stress testing framework to consider second round effects and contagion.",
    "Identified gaps in data collection on:",
    "Need to strengthen supervision of related party, group-wide, and money-laundering risks.",
    "Supervisors should be enabled to take timely action to correct unsustainable risk taking, including unsustainable lending and business models.",
    "Authorities should enhance monitoring and oversight related to contagion/spill over risks.",
    "Enhance the stress testing framework to explicitly consider:",
    "Improve data collection on:",
    "Strengthen supervision of:",
    "Ensure supervisors have capacity and tools to take timely corrective action against unsustainable lending and business models.",
    "Enhance monitoring and oversight related to contagion and spillover risks.",
    "**1autea2020001 - Executive Summary**"
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