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Banking sector of the Czech Republic: development in crisis period and present
[Bankovní sektor České republiky: vývoj v krizovém období a současnost]

Author

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  • Zbyněk Revenda

Abstract

The author analyzes the development of the Czech banking sector over the past ten years, focusing on selected assets and liabilities to assess the liquidity and solvency situation and development. Banks did not have any more serious problems even in the years of economic downturn 2009 and 2012-2013, they did not need assistance from the central bank or from the state. A potential and paradoxical problem may be the high level of free reserves at the central bank. It is a risk-free and highly liquid asset, but also a low-yielding asset. This also leads to virtually nil state of bank lending from the central bank. The main reason for the dramatic growth of reserves was foreign exchange intervention against the koruna. Banks as a whole are also solvent, the average capital adequacy considerably exceeds the level of minimum requirements. Severe financial crises are not connected with the Czech banking system in the analyzed period.

Suggested Citation

  • Zbyněk Revenda, 2017. "Banking sector of the Czech Republic: development in crisis period and present [Bankovní sektor České republiky: vývoj v krizovém období a současnost]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2017(3), pages 39-55.
    • Handle: RePEc:prg:jnlcfu:v:2017:y:2017:i:3:id:500:p:39-55
    DOI: 10.18267/j.cfuc.500
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    2. Charles P. Kindleberger & Robert Z. Aliber, 2005. "Manias, Panics and Crashes," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-62804-5, October.
    3. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
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    More about this item

    Keywords

    Bank assets; Bank liabilities; Bank Reserves; Capital adequacy; Crisis; Liquidity; Solvency; Aktiva bank; Pasiva bank; Rezervy bank; Kapitálová přiměřenost; Krize; likvidita; Solventnost;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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