Financial market 2025: risks for companies and challenges for banks!

Financial market 2025: risks for companies and challenges for banks!

On December 9, 2024, the Austrian Financial Market Authority (FMA) presented its supervisory and audit priorities for 2025. In a current report, FMA board members Helmut Ettl and Eduard Müller warn that the economic conditions for the financial sector will continue to worsen in the coming years. In particular, the ongoing economic crisis and increased interest rates are already having a noticeable impact on companies' balance sheets. Damage from factory closures and possible company bankruptcies could soon lead to an increase in unemployment, which would increase pressure on households in Austria, as reported on the OTS website. The FMA sees the need for companies to use their profits from previous years to strengthen their capital base and cushion future risks.

Challenges for the financial system

The Financial Markets Authority is also addressing the long-term challenges in the financial sector, which have been exacerbated by the COVID-19 pandemic, inflation and geopolitical tensions. In particular, the aggressive expansion of Austrian banks into Eastern Europe and the associated risks are topics of central importance. Ettl emphasizes that although supervisory authorities have introduced reforms in the past, these must be continuously developed in order to keep the financial system resilient. Other key risks include the need for appropriate valuation and careful handling of profit distributions in order to better deal with future crises such as this STANDARD has stated.

The FMA Board of Directors, in particular Helmut Ettl, who has been in office since 2008, has experienced the developments and challenges of the financial market first hand. He emphasizes that the FMA has learned from past crises and is now in a position to respond to current and future challenges with an improved regulatory framework. The FMA is also celebrating its 20th anniversary and taking stock of developments in the banking landscape, which have been shaped by various crises. Overall, the FMA aims to both strengthen trust in the financial system and adapt supervision to the current circumstances.