Annual Report 2004

Statement
Six years after the beginning of Stage Three of
Economic and Monetary Union (EMU), the
Eurosystem may look back on the successful
introduction of the common currency. Continuing
European integration and EU enlargement
pose new challenges, which will also require
adjustments within the European System of
Central Banks (ESCB).
Historically low interest rates and the ongoing
strong appreciation of the euro against
the U.S. dollar have created a difficult operational
environment for Eurosystem central
banks. Despite these demanding conditions,
the Oesterreichische Nationalbank (OeNB)
managed to achieve profits close to the longterm
average in 2004. This is particularly remarkable
given the significant revenue shortfalls
of other national central banks (NCBs). The
record profits following the establishment of
the monetary union as well as the high risk provisions
of recent years, however, have put a cap
on future profit potential. In this context it is
important to call to mind the NCBsÕ obligation
within the ESCB to hold sufficient reserves to
fulfill their tasks and to make risk provisions.
Compliance with this obligation is a prerequisite
for Eurosystem credibility.
In addition to fulfilling a wide range of responsibilities
in the field of monetary policy implementation,
the OeNB also contributed significantly
to the ESCBÕs activities in 2004. Special
emphasis was placed on the communication of
monetary policy objectives, the promotion of financial
stability and the preparations for a Single
Euro Payments Area (SEPA). Once more, the
OeNBÕs subsidiaries were key for the efficient
provision of means of payment which meet the
highest security requirements.
Looking at the challenges that lie ahead, cooperation
with Central and Southeastern European
countries will take on an important role
in the future, and the OeNBÕs expertise in this
area will prove very valuable for the Eurosystem.
Efficient performance is crucial for longerterm
corporate success, in particular for a small
NCB. Thus, it is of great importance for the
OeNB to continue optimizing its business processes,
to make effective use of synergies and to
promote cooperation. The high degree of trust
the OeNB enjoys as a monetary institution is
an acknowledgement of its performance and a
mandate for the future.
Herbert Schimetschek
President
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Annual Report 2004