E58 - Central Banks and Their PoliciesReturn

The article deals with the analysis and evaluation of the application of macroprudential policy in the Czech Republic after five years of experience in identifying sub macroprudential objectives and selecting appropriate tools. It compares the recommended methodology of the European Systemic Risk Board with the methodology applied by the Czech National Bank. Selected sources of instability and corresponding tools for analysis are divided into two groups. The first group consists of tools that its significance and impact are subject to great discussion. It is a countercyclical capital reserve and risk management of retail loans secured by residential real estate. The second group of instruments represents a capital reserve to cover systemic risk and capital reserve for systemically important banks, methods for reducing the concentration of sovereign exposures and safety capital reserve.

The article, in general terms, describes the sovereign risk and the risk of excessive concentration of sovereign exposures within the balance sheets of the banks. Based on an analysis focused on the development of this phenomenon within the given period, both in the Czech Republic and in other selected countries, the rate of effectiveness of the Czech central bank's position towards this potential source of financial instability was assessed. Mutual interconnection of the banking sector and the state is percieved as significant and potentially risky. The reasons are related to many interconnections that may adversely affect the stability of one or both sectors, in case of adverse changes, with an overlap into the real economy. The article highlights the main sections of mutual relationships between the state and the banking sector, trying to clarify them. Further, identifies the relevant sources of instability, that are being discussed.

Our paper is a reaction to changes made in the structure and construction of balance of payments introduced by the sixth edition of International Monetary Fund´s (IMF) Balance of Payments and International Investment Position Manual (BMP6). The first part of our paper provides a brief historical account of the methodological development of individual IMF´s manuals. The main changes are analysed and compared with the preceding manual, the BPM5, which was released in 1993. The new manual emphasises both the stock as well as the flow variables. For this reason, a detailed analysis of evolution of the international investment position that records, at a point in time, the value and composition of financial assets and liabilities of residents of an economy to non-residents is provided. Various factors as well as the impact of BMP6 new methodology that influence the development of international investment position of the Czech Republic between 2008 to 2015 are discussed. The attention has also been drawn to the evolution of external debt in relation to GDP and particular sectors. We conclude our paper with a discussion of factors that affect the value of external debt.

On 7th of November 2013 the Board of the Czech National Bank decided to start using the exchange rate CZK/EUR as an additional instrument for easing the monetary conditions in order to avoid the long-term undershooting of the inflation target. The aim of this paper is to contribute to the discussion on CNB Board´s resolution mentioned above showing that our country has a very bad experience with deflation. In the first part the deflation and its "good" and "bad" versions are defined. The second part deals with the Czechoslovak government´s effort to appreciate the currency, which leaded into deflation connected with economic recession. In the third part the influence of the Great Depression and of the end of the classical Gold Standard on the Czechoslovak economy is assessed. Lastly the deflation which took place at the turn of the 20th century and its possible implications on the monetary policy are mentioned.

Presented article deals with a theoretical analysis of dynamics of both net international investment position to GDP ratio and net costs of negative investment position in terms of its main determinants. It also analyzes a special case of a link between negative net investment position and positive net revenues. Next it is discussed how far is this case possible in transitive countries. The article points out important differences between a position of large advanced and small transitive economies in case of costs of net investment position. With respect to this main factors as country's position of FDI lender/debtor, country's currency position of investment/invoicing currency, exogeneity of foreign assets and liabilities interest yields and last but not least role of FX reserves accumulation by central bank and position of foreign currency denominated loans on foreign liabilities side are discussed

The goal of the paper is to define the issue of central banking in the rule of law context in the Czech Republic. The paper deals both with the legislative framework during the creation of Czechoslovak sovereign monetary policy after the year 1918 and legislative framework of modern central banking in the Czech Republic after the year 1993. It defines present status and legislative framework of central bank and offers an opinion on the future of central banking in relation to European System of Central Banks harmonization processes, future legislative framework and practical conduct of legally defined central banking functions.

The subject of article consists in banking deposit insurance system and in international experiences set the principles of efficient banking deposit insurance system for modern banking systems in global financial market. The recommended design of deposit insurance system is explicit insurance with broad client's protection, which is comparable with systems in other countries where clients can easy transfer their deposit.

The article dealed about finding suitable model market conformal governing on czech financial market. Current organization of CNB as supervisory body in Czech republic are discussed. Futher the study of World bank about corporate governance in insurance branch and by care of consumers on financial market is commented. Authors meaning is not to increase the governing measure on financial markets.