OeNB: Central bank seeks orderly deleveraging

Andreas Ittner, executive director, Austrian Nationalbank (OeNB), discusses the challenges of regulating banks with diverse emerging European portfolios.

What are the key challenges facing regulators of banks with subsidiaries in central and eastern Europe (CEE)?

First of all, CEE is not CEE. The umbrella-term CEE covers countries as diverse – economically and politically – as the Czech Republic and  Poland  on the one hand and Kazakhstan and Ukraine on the other. Second, the challenges of regulators of banks with subsidiaries in CEE do not, broadly speaking, differ from the challenges of other regulators of international banks active in emerging markets. Looking at the challenges from this angle, they are indeed time-consistent: the OeNB, just like any other home supervisor, has to make sure that banks are able to bear those risks, for example through adequate capital positions or stable funding sources, both at group level and at subsidiary level.

What is the state of regulation in Austria for banks with CEE subsidiaries?

In principle, we adhere to the...