Press Releases

The 33^rd Economics Conference, hosted by the Oesterreichische Nationalbank (OeNB) on May 12 and 13, 2005, at the Vienna Marriott Hotel, focused on the topic “Monetary Policy and Financial Stability”. At the close of conference, Josef Christl, executive director of the OeNB, re-emphasized that price stability and sound public finances are key components of financial stability.

In his concluding remarks, Mr. Christl underscored the growing significance of macroprudential supervision, i.e. the importance of analyzing and preventing potential systemic risks in the financial sector resulting from increasingly complex financial markets and the growing globalization of these markets.In Austria, macroprudential supervision is primarily carried out by the OeNB, which has been fulfilling this task successfully. This has also been repeatedly confirmed by the IMF’s Financial Stability Assessment Program (FSAP) and recent IMF Article IV consultations. The OeNB is committed to high transparency with regard to its supervisory tasks and keeps the public well informed through numerous publications and events in this respect.

With asset prices rising in several EU countries, asset price inflation has been an issue at the European level, giving rise to the question as to whether the ECB’s monetary policy should respond more explicitly and more strongly to the development of asset prices. Executive Director Christl rejected any such demands, indicating that asset price developments were already taken into consideration under the ECB’s monetary policy strategy. After all, the ECB’s credible commitment to price stability is its key contribution to containing an excessive rise in asset prices. 

Numerous speakers at the international conference stressed that Basel II was going to contribute to macroeconomic stability: Better capital provisions, modern risk management practices and adequate financial market supervision will reduce the volume of unexpected defaults, thus stabilizing the supply of loans over the business cycle. Executive Director Christl stressed that Basel II is not going to impair access to loans for small and medium-sized enterprises, the backbone of the Austrian economy. 

With regard to the future architecture of European financial supervision, Mr. Christl noted that a European financial supervisory authority was only feasible in the long run, if at all.

Finally, Mr. Christl underlined the close relationship between monetary policy and the stability of the financial system: “Price stability and the stability of the financial system are mutually reinforcing objectives.”