VIENNA (Reuters) - Austria’s Financial Market Authority (FMA) will be solely in charge of banking supervision, shouldering all related tasks hitherto performed jointly with the central bank, under a shake-up announced on Tuesday by the Finance Ministry.
Until now, supervision of banks operating in Austria and not directly overseen by the European Central Bank’s banking watchdog SSM has been shared by the FMA and the Austrian National Bank (ONB).
Currently, the FMA oversees compliance with banking regulations while the ONB is in charge of fact-finding, on-site inspections, analysis of information, drafting reports and processing data reporting.
Over the course of 2019, all regulatory responsibilities will be bundled under the roof of the FMA, Finance Minister Hartwig Loeger told journalists in Vienna. He expects annual cost savings of 10 million euros ($11.4 million).
“We want to make sure that there will be no duplications and overlaps,” Loeger said. In the event of a financial crisis or in order to identify systemic risks promptly, the ONB might instruct the FMA to examine individual banks, he said.
The shakeup, a response in part to court of auditors criticism of overlapping approaches, drew strong criticism from the ONB, which sees increasing risks in case of a new crisis.
“To some extent I see a tendency among some members of this government to see the ONB as a form of subordinate institution and I can only say that this is a slippery slope,” said ONB Governor Ewald Nowotny, also a member of the European Central Bank’s Governing Council.
“The (Austrian) central bank’s independence is one of the most valuable things and we are very, very sensitive about it.”
Nowotny warned earlier that such a move would be unique in Europe. He said that since a central bank is involved in bank rescue operations in the event of a crisis, it was important to have first-hand information and to share information with other European central banks.
Reporting by Alexandra Schwarz-Goerlich and Francois Murphy; Writing by Kirsti Knolle; Editing by Mark Heinrich