In this article we simulate how much the capital of a parent bank must be increased above the minimum capital requirement applying to the parent alone as a result of a requirement being imposed on the banking group as a whole, and how the probability of failure of a subsidiary and the group...

Macroeconomic forecasters are often criticized for a lack of transparency when presenting their forecasts. To deter such criticism, the transparency of the forecasting process should be enhanced by tracing and explaining the effects of data revisions and expert judgment updates on variations in...

This study examines the use of the exchange rate by the Czech National Bank as a monetary policy instrument at the zero lower bound on interest rates. It provides a review of the economic literature on unconventional monetary policy instruments and particularly on the possibility of using the...

This paper focuses on the current issues linked to the goals of banking regulation and supervision. The banking supervision policy carried out in transition countries – Central and Eastern Europe – takes into account a range of specific phenomena. The key distinctive factor of...

Currency substitution appears to be an important issue affecting the design of monetary policy, especially in transition economies. Therefore, this paper strives to analyse the particular relevance of the currency substitution phenomenon in the Czech Republic’s case. We initially discuss...

This is a study of what asset price can tell us about the evolving credibility of the monetary policy of the Czech National Bank (CNB). From the beginning of the 1990s, several market economies adopted direct inflation targeting (DIT). The focus of our analysis is to examine the effect of...

In this paper we use balance-sheet data and information on bankruptcy to study the relationship between investment, financial constraints, and bankruptcy in a post-transition country. Our data constitute a dynamic panel and cover the period 2006–2011, which also allows us to study the...

This paper uses firm-level financial data for Czech firms and tests for the role of companies’ financial structure in the transmission of monetary policy. Our results indicate that higher short-term interest rates coincide with lower shares of total debt, short-term bank loans, and...

A sharp increase in unemployment accompanied by a relatively muted response of inflation during the Great Recession cast further doubts on the validity of the Phillips curve. With the aid of dynamic model averaging (Raftery et al., 2010), this paper aims to highlight that the existence of a...

We develop a methodology for identifying financially distressed households and use it for testing the responses to shocks to the unemployment rate, the interest rate and prices of essential expenditure in the Czech Republic. We extend the approach of Johansson and Persson (2006) for Sweden and...