"The aim of the initiative is that all central banks co-ordinate their activities," said Herbert Stepic, who left his role as chief executive at RBI earlier this year to become a senior adviser to the bank's board. "This is highly wanted. We want to have strong regulation and we want to have unified regulation."
Claus Raidl, president of the Austrian Central Bank, agreed with Stepic. "We have had a lot of co-operation with banks," he said.
The Vienna 2.0 initiative was formed in November 2011 as a working group to discuss potential solutions to bank deleveraging in emerging Europe. The European Commission, European Banking Authority, European Systemic Risk Board, IMF, EBRD, European Investment Bank and the World Bank were the first participants.
However, Austria's Central Bank caught the market off guard at the end of November 2011 when, alongside the Austrian Financial Market Authority, it told lenders to limit their central and eastern Europe subsidiaries' lending growth to what could be financed locally.
This move surprised the representatives of Vienna 2.0 and acted as a catalyst in changing the focus of the initiative to increasing communication between central banks and regulatory bodies.
"The measure the central bank took in 2011 to restrict Austrian loans did not have any negative effects on our lending," said Stepic, speaking on Tuesday at a CEE panel discussion hosted by 21st Austria. "Austrian, French and Italian banks have been taking over lending roles that, in other emerging markets, the IMF would be doing."
However, representatives of Vienna 2.0 said in August that, although foreign parent banks did not withdraw from the region as sharply as first predicted, cross-border funding restrictions persist and a funding crisis is still possible.