Austria is embarking on a root-and-branch reform of its financial supervisory apparatus which involves the Financial Market Authority (the Finanzmarktaufsichtsbehörde or FMA), the Oesterreichische Nationalbank (OeNB) and the Federal Ministry of Finance (the Bundesministerium für Finanzen or BMF).

The reason for the overhaul is that the rush to close all the gaps in regulation after the great financial crisis struck in 2008 resulted in some higgledy-piggledy arrangements that the Austrian Government now wants to smooth over. The OeNB will retain its competence for macroprudential supervision and analysis, i.e. everything to do with market stability. Competence for on-site and off-site supervision will reside totally at the FMA for the first time. The people who now do this at the OeNB will move to the FMA. The Government will try to support innovations in relation to financial products and processes.

The reason for the overhaul is that the rush to close all the gaps in regulation after the great financial crisis struck in 2008 resulted in some haphazard arrangements that the Austrian Government now wants to smooth over. The OeNB will retain its competence for macroprudential supervision and analysis, i.e. everything to do with market stability. Competence for on-site and off-site supervision will reside totally at the FMA for the first time. The people who now do this at the OeNB will move to the FMA. The Government will try to support innovations in relation to financial products and processes.

The stated aim of the reform is to organise the system of financial market supervision more efficiently by eliminating duplications of effort, speeding up decision-making processes, creating clear points of contact between regulator, and prevailing on the regulators to take "an approach of guidance rather than punishment." A "competence centre for financial market strategy and development" will be established at the OeNB to this end.

The Government wants to combine different parts of its agenda with regard to banking supervision in a single institution (One Stop Shop), thereby eliminating duplication of effort between the FMA and the OeNB. In this regard a structural reform will take place during the first half of 2019 at both institutions. By the end of the year, both regulators will have signed a well-publicised memorandum of understanding that will help them co-ordinate all financial market strategy and set out the nuts and bolts of their collaboration and respective tasks clearly. The OeNB, stripped of its on-and-off-site supervisory function, will be able to issue inspection orders to the FMA.

The FMA is still going to supervise and oversee banks, insurance companies, pension funds (Pensionskassen), corporate provision funds, asset managers, financial intermediaries and providers of financial products for microprudential purposes, in much the same way as the UK's Financial Conduct Authority does with 800-900 medium-to-large firms, leaving the truly large firms to the Prudential Regulation Authority. It already has as its goal the protection of such consumers as depositors, savers, investors and insured persons and this will continue. It will carry on supervising the capital market. It will, however, cede its competence for accounting enforcement to the Audit Oversight Body of Austria (the APAB or Abschlussprüferaufsichtsbehörde). Finance minister Hartwig Löger is in charge of the whole process.