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Austria to Maintain Systemic Risk Buffer at 1% of Risk-Weighted Assets

The Austrian Financial Market Authority (FMA) has announced that it will maintain the systemic risk buffer (SyRB) at a level of up to 1% of risk-weighted assets in common equity tier 1 (CET1), effective immediately.

Background

The SyRB is designed to mitigate the vulnerability of the banking sector against systemic risks, which can have significant implications for financial stability and economic growth. The buffer has been in place since January 2016 and has been effective in reducing long-term systemic structural risks and strengthening banks’ resilience to these risks.

Decision

After a comprehensive assessment of the systemic risks facing the Austrian banking system, the FMA has determined that there is no need to adjust the SyRB given the current economic conditions. The buffer requirements will not increase as a result of changes to formal-legal requirements.

Application

The SyRB will continue to apply to all Austrian banks, with the exception of Erste Bank der oesterreichischen Sparkassen AG and BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft, which have been identified as systemically important institutions (O-SII) and will be subject to a separate buffer.

Cross-Border Effects

The FMA has assessed that the SyRB will not have any significant cross-border effects on other European Union member states or the internal market. The agency has also determined that there is no risk of regulatory arbitrage within Austria.

Publication

The Capital Buffer Regulation, which sets out the requirements for the SyRB, is expected to be published in June 2021, following the implementation of CRD V into Austrian law.

Contact Information

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