Austrian central bank increases regulatory role

The National Bank of Austria has strengthened its hold on the regulation of the banking industry following the introduction of a new financial market supervision framework.

The reform limits the role of the Finanzmarktaufsichtsbehorde (FMA), the banking regulator, which shares responsibility with the central bank for supervision. From now on all on-site bank searches will be conducted only by the central bank, which will get extra funds and staff, and it will also take charge of the qualitative analysis of banking data.

The FMA, however, will remain responsible for the institutional processes involved in imposing sanctions. The regulator will also get extra funds for their securities supervision department.

Under the new rules, the two authorities will also share data.

A spokesperson for the FMA told Central Bank News that reform was needed as a result of a series of banking crises that have erupted in the jurisdiction during the past ten years. The talk of reform began during the 2006 election campaign.

The amount of funds allocated the central bank and the regulator is set to be announced in a fortnight.