Work detail

Banking Supervision in Transition: Czech Experience 1990-2000

Author: Mgr. Roman Pazderník
Year: 2003 - summer
Leaders: † prof. Ing. Karel Kouba DrSc.
Work type: Finance and Banking
Language: English
Pages: 106
Awards and prizes: M.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good masters diploma thesis
Abstract: The thesis deals with question, whether approach of the banking supervision was appropriate during transition of the Czech economy, given aims of the supervisor (minimalization costs of outsiders). Decisions about the transition strategy had an adverse impact on the banking sector. The supervisor also faced internal difficulties, such as lack of capacity, experiences and missing regulatory framework. Thence, despite poor performance of banks, it is not obvious to ascribe responsibility to the CNB. According to opportunity costs approach, the supervisor did not choose the best strategy to meet its aim due to granting priority to a segment with only a fractional market share. Market shares and costs to outsiders later proved to be highly proportionate. The Argument of the thesis suggests analytical tools for developments in the corporate sector (privatization of money), in the banking sector (reform trap) and in the banking supervision (regulated supervision). The CNB could have been more efficient, had not it rely on the state control of big banks and had it better immunity against pressures from outside. The decision node, which lead to high costs, could have been avoided, were the big banks privatized in the outset of transition to strategic investors, and mitigated, had a less cumbersome way to competition on the banking market been chosen.
Downloadable: Diploma Thesis - Pazderník


McKinsey & Company