Austria’s six biggest banks have less capital and rely more on wholesale funding than their peers in eastern Europe, and they need to build up their risk buffers, the central bank’s chief bank supervisor said.
The European Systemic Risk Board, Europe’s new 65-member risk watchdog, will discuss ways to reduce the risks of foreign currency loans, said Andreas Ittner, the Austrian central bank’s director responsible for bank supervision.
The Austrian central bank lowered its estimates on how much additional core Tier 1 capital the country’s lenders need to comply with global rules and pay back state aid by 30 percent to 7 billion euros ($10 billion).
Austrian banks’ capital shortfall probably worsened over the third quarter as losses announced at Erste Group Bank AG and Oesterreichische Volksbanken AG put the institutions further from a 9 percent target.
Austria’s central bank said Hypo Alpe-Adria-Bank International AG will likely avoid a 16 billion- euro ($21 billion) insolvency as policy makers negotiate with the European Commission over the nationalized lender.