VIENNA Dec 5 The Austrian National Bank (ONB)
on Monday disputed a finding by the European Union's financial
risk watchdog that Austria's residential property market risks
overheating, at least partly as a side-effect of ultra-low
Austria and seven other countries face a medium-term risk
either from overvaluation or excessive household debt levels, a
systemic risk to EU financial stability that requires regulatory
attention, the European Systemic Risk Board said last month.
"The ONB takes a more differentiated approach in its risk
assessment; in the ONB's view, the current systemic risks
emanating from housing finance in Austria are limited," the
central bank said in a statement on its half-yearly Financial
Stability Report without elaborating.
Austrian banks have managed to reduce the amount of bad
loans on their books but must continue those efforts and bolster
their capital ratios, the central bank said.
Many Austrian banks have made countries in central, eastern
and southeastern Europe (CESEE) the core of their business, and
the ONB said that was where the most work remained to be done.
"The amount of nonperforming loans, which are to a large
part in the books of Austrian banks' CESEE subsidiaries, remains
a burden for some banks that should be addressed proactively in
order to support new lending," the ONB said.
Banks had also continued to bolster their capital buffers
but they remained below the European average at the middle of
this year, it added.
(Reporting by Francois Murphy; Editing by Kirsti Knolle)