Austria: Selected Issues

International Monetary Fund

No 2012/252, IMF Staff Country Reports from International Monetary Fund

Abstract: The Austrian authorities introduced new supervisory guidance aiming at constraining the funding model of the three largest Austrian banks’ subsidiaries. The guidance introduced the concept of Loan-to-Local-Stable-Funding Ratio (LLSFR) as a monitoring tool of business model sustainability. Austrian banks’ subsidiaries have a significant market share in several Central, Eastern and South Eastern Europe (CESEE) countries. Evidence for CESEE banks suggests that the LLSFR is an appropriate tool to monitor the possible buildup of credit risk besides its more obvious role as an indicator of liquidity risk.

Keywords: ISCR; CR; bank; loan; Loan-to-Deposit Ratio; LLSFR; asset; CESEE bank; CESEE subsidiary; CESEE subsidiaries' share; LDR ratio; asset quality; aggregate LDR; Credit risk; Loan loss provisions; Loans; Commercial banks; Liquidity risk; Europe (search for similar items in EconPapers)
Pages: 12
Date: 2012-08-31
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