Dangerous demand?

Expert warns against green light for bank levy

Financial institutions are naturally critical of the bank levy demanded by the FPÖ.

(Bild: APA/HERBERT NEUBAUER)

A possible bank levy, which is being discussed as an FPÖ demand in the coalition negotiations, is not only causing headaches for the ÖVP. The Raiffeisen Group naturally takes a critical view of the blue demand, as such a levy would probably further curb the already restricted lending, warned Gunter Deuber, Head of Raiffeisen Research.

According to Deuber, the capitalization of Austrian banks is currently good, but banks are already preparing for lower earnings due to rising risk costs and falling interest rates.

Levy "counterproductive" due to difficult economic situation
In addition, the relatively high profits of domestic banks in recent years are also due to special effects as a result of the high proportion of variable loans in this country. "This is the only area where we can talk about disproportionately high profits for Austrian banks in the eurozone." In principle, such a levy is rather counterproductive in the current difficult economic situation with low investment, the banking economist found.

Wifo banking expert Thomas Url takes a similar view. A special tax for just one sector would do more harm to the location and could deter investors. In addition, there have been stricter capital requirements for the sector since the financial crisis, but falling interest rates will result in lower profits in the coming years and therefore less potential to build up more equity. According to Url, a bank tax would further reduce the ability of banks to build up equity capital and could also reduce the supply of credit as a result.

National Bank Governor Robert Holzmann

(Bild: Reinhard Holl)

OeNB: Bank levy "sensible choice" for budget restructuring
By contrast, Robert Holzmann, still Governor of the National Bank, described the idea as a "sensible choice" for a contribution to budget restructuring. Although a bank tax is a "political decision", it could help a potential blue-black government to close budget gaps, according to a report by the financial news agency Bloomberg.

Holzmann was appointed OeNB Governor in 2019 with the support of the FPÖ. His term of office runs until the end of August 2025 and he will be succeeded by Minister of Economics and Labor Martin Kocher.

AK and Momentum Institute in favor of levy
The bank levy is also known to be supported by the Chamber of Labor and the Momentum Institute. "It is high time that the winners of the crisis finally make a fair contribution to budget consolidation", AK President Renate Anderl demanded on Tuesday. Momentum chief economist Oliver Picek expressed a similar view: "The banks were one of the few big winners of the inflation and high interest rates of recent years. An appropriate contribution from their excess profits to the austerity package is overdue."