13th meeting of the Financial Market Stability Board

At its 13th meeting on September 15, 2017, the Financial Market Stability Board (FMSB) adjusted its 2015 recommendation concerning the systemic risk buffer (SRB). Its recommendation concerning the level of the countercyclical capital buffer (CBB) remained unchanged.

Evaluation of the systemic risk buffer

At its last two meetings, the FMSB reviewed the level of the SRB.

Given that systemic risks may manifest themselves both at the consolidated and the unconsolidated level and that, in particular within cross-border banking groups, capital allocation in crisis situations would not be flexible, the FMSB recommends that the SRB be activated also at the unconsolidated level, namely for seven credit institutions. Compared to the FMSB recommendation of 2015, two additional credit institutions have been added to the list of banks that are subjected to an SRB.

The overall SRB review will be completed by the end of the first half of 2018. The recommended SRB levels for each credit institution are listed in the FSMB’s recommendation.

FMSB recommends keeping the countercyclical capital buffer (CCB) rate at 0%

The FMSB recommends that the Financial Market Authority (FMA) leave the CCB rate at 0% of risk-weighted assets as from January 1, 2018. Given that the main indicator (credit-to-GDP gap¹) for all credit aggregates used remains negative (as in previous quarters), there are no signs of excessive credit growth.

Information on the FMSB

The FMSB, which became operational in 2014, works toward strengthening financial stability. Its members are representatives of the Austrian Federal Ministry of Finance, the Fiscal Advisory Council, the Financial Market Authority (FMA) and the Oesterreichische Nationalbank (OeNB). The FMSB may issue recommendations to the FMA and provide risk warnings.
 

¹ Difference between the credit-to-GDP ratio and its trend.