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Löger/Fuchs: FMA assumes overall supervision of the financial market Regulation and supervision will be more distinctly separated. The reform will save costs and simplify structures.

Finance Minister Hartwig Löger and Secretary of State Hubert Fuchs have presented at a press conference the reform of the supervision of the financial market. This provides that banking supervision will in future be conducted by the Financial Markets Authority (FMA). This means that the FMA will assume the entire regulatory supervision of the financial market. The role of regulator will in future be more particularly the concern of the Federal Ministry of Finance (BMF) and the Parliament. The Austrian National Bank (OeNB) will be entrusted with the issues of finance market stability. For this purpose it will be given the capacity, in the event of crises and for the early recognition of systemic risks, to issue instructions for investigation to the FMA.

“With the reform of supervision, this Federal Government is putting into effect a project which was previously put on the back burner for years. The reform is based on an expert appraisal of the situation, and will bring about improvements in every respect. We are boosting costs efficiency, doing away with duplications and redundancies, and creating an improved service orientation. The FMA is being reformed, and in due course will be withdrawing from regulatory matters, concentrating instead fully on the supervisory role. The National Bank will retain its powers in the context of finance market stability, and in the event of a crisis can issue instructions for investigation to the FMA”, the Finance Minister said as an adjunct to the press conference.

The basic consideration behind the reform is restructuring to create a modern supervisory structure which truly reflects contemporary requirements. Duplications and redundancies mean that the present system is seen as inefficient, costs-intensive, and has become detached from actual practice. As well as this, the shortcomings in the division between legislative and executive powers are becoming problematic, according to Secretary of State Fuchs. “The Court of Audit also criticised the present system in a report, and recommended the integration of banking supervision into one organisation. This reform means that banking supervision will be optimised, and Austria strengthened still more as a financial centre. At the same time, a more vigorous obligation for reporting to the National Council will provide better monitoring of the FMA,” is how Fuchs views the intended structure.

Finance Minister Hartwig Löger and Finance Secretary of State Hubert Fuchs emphasised that presentation to the Council of Ministers is the first stage of the reform process. By completion, the staff of the OeNB and also of the FMA will be involved.

20 November 2018