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Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
1
The FMA and the Austrian Market for Building Societies
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
2
Agenda
Austrian Financial Market Authority (FMA)
Austrian Banking Sector
Austrian Market for Building Societies
Austrian Building Societies in CESEE
Crisis-related Lessons Learned
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
3
Austrian Financial Market Authority I
FMA commenced operational activities on 1 April 2002
institution under public law
independent and integrated supervisory authority
Areas of Financial Market Supervision:
Banking Supervision
Insurance Supervision
Pension Fund Supervision
Securities Supervision
Supervision of Financial Conglomerates
Supervision of Grey Capital Market
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
4
Austrian Financial Market Authority II
Staff of the FMA:
number of staff as of 31 December 2009: 290 (target figure)
two third have a university degree
personnel costs account for about 60% of the total costs of the FMA
Budget of the FMA:
2009: 39.7 mio. EUR (target figure)
costs are borne by the supervised entities themselves
(government contribution: 3.5 mio. EUR p.a.)
direct and indirect allocation of the supervision costs according
to accounting groups (FMA Cost Regulation)
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
5
Organisation Chart FMA
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
6
Austrian Financial Market Authority IV
FMA contributes towards financial market stability in Austria
FMA reinforces confidence in the ability of the Austrian financial
market to function
FMA monitors and takes any measures necessary to ensure
compliance with provisions of law
FMA protects investors, creditors and consumers in accordance
with provisions of law
FMA issues regulations and minimum standards
FMA conducts administrative penal proceedings
strong cooperation with the Austrian National Bank (OeNB)
with regard to Banking Supervision
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
7
Number of Credit Institutions 859
(as of 30 June 2009):
Raiffeisen Credit Cooperatives 549
Volksbank Credit Cooperatives 68
Savings Banks 55
Joint Stock Banks and Private Banks 51
State Mortgage Banks 11
Building Societies 4
Other Special Purpose Banks 92
Member State Branches 29
Austrian Banking Sector I
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
8
Austrian Banking Sector II
as of 30 June 2009 Credit Institutions
(in total)
Building Societies
(in total)
Aggregated Total Assets 1,058,394 mio. 22,465 mio.
Expected profit or loss on
ordinary activities for 2009
2,747 mio. 74 mio.
Ø Cost-Income Ratio 62.03% 72.80%
Ø Solvency Ratio 18.19% 13.75%
Ø Core Capital Ratio 13.47% 8.06%
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
9
Austrian Market for Building Societies I
saving with building societies is very popular in Austria
~ 5 million contracts (8.1 million inhabitants)
Austrian Building Society Act entered into force on
1 January 1994
tax importance (total bonus on building society deposits
paid out to home purchase savers: 134 million EUR in 2008)
financial crisis and fear of investors have fostered the
investment in home loan and savings contracts in 2009,
however total financing by the building societies has declined
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
10
as of
31 December 2007
as of
31 December 2008
Change in %
New contracts 944,435 974,240 + 3.16
Total number of Contracts 5,081,059 5,037,688 - 0.85
Building society deposits
(million EUR)
17,260 17,128 - 0.76
Total financing
(million EUR)
3,520 3,638 + 3.35
Building society loans
(million EUR)
15,609 16,712 + 7.07
Austrian Market for Building Societies II
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
11
Austrian Market for Building Societies III
-
500.000,00
1.000.000,00
1.500.000,00
2.000.000,00
2.500.000,00
3.000.000,00
3.500.000,00
4.000.000,00
4.500.000,00
5.000.000,00
5.500.000,00
new contracts total number of contracts
as of 31 December 2006as of 31 December 2007as of 31 December 2008
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
12
Austrian Market for Building Societies IV
-2.000,004.000,006.000,008.000,00
10.000,0012.000,0014.000,0016.000,0018.000,0020.000,00
building society deposits(mio. EUR)
total financing (mio. EUR) building society loans(mio. EUR)
as of 31 December 2006as of 31 December 2007as of 31 December 2008
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
13
Austrian Market for Building Societies V
building societies in Austria are special purpose
credit institutions
licence is limited to certain banking activities
and auxiliary activities
legal framework is laid down in the Austrian Building
Society Act and in the related regulation
act and regulation are currently in amendment:
scope of the licence
investment rules
risk hedging / hedging instruments
limits for building society loans
balance sheet format
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
14
Austrian Market for Building Societies VI
Savings purposes according to law: financing housing
education (as of 2005)
(home) care (as of 2005)
buiding society deposits are covered by the deposit guarantee schemes (limited to 100,000 EUR as of 1 January 2010)
building society terms need approval by the FMA (as regards e.g. interest rates)
granting loans solely against mortgage registration (limit according to law: 80%) or other securities, loans without securities are limited to the amount of 25 000 EUR (as of 1 January 2010)
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
15
Austrian Building Societies in CESEE
Raiffeisen Bausparkasse S-Bausparkasse Wüstenrot
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
16
Crisis-related lessons learned I
building societies in Austria are also affected by the crisis
they need to improve their risk management procedures
focus on the core activity (financing housing) makes
the system work
amendments to the legal framework in Austria form
one measure
increasing transparency for the savers and consumer
protection
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
17
Crisis-related lessons learned II
6 theses for the strengthening of financial market supervision
We need
1. the globalization of the regulatory framework
2. a „European Financial Supervisory Authority“
3. a consistent and integrated supervisory approach
We have to
1. prevent the excessive use of special purpose vehicles not consolidated
and therefore not covered by risk management
2. balance system-relevant significance and acceptable risk exposure
3. ensure risk-based and anticyclical capital backing
Michael Hysek Head of Banking Supervision Financial Market Authority (FMA)
Annual Meeting of the EFBS Salzburg, 1 October 2009
18
www.fma.gv.at
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