How Can the Czech National Bank Eliminate the Zero Lower Bound on Interest Rates? A Case Study
|Author:||Bc. Alexandra Katinová|
|Year:||2018 - summer|
|Leaders:|| doc. PhDr. Tomáš Havránek Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||The thesis provides case study research on the feasibility of the negative interest
rate policy in the context of the Czech Republic. No major obstacles
opposing the policy itself were found in the bases of the Czech legal system,
however, a list of acts explicitly affected by the value of policy rates needs to
be adjusted to prevent misinterpretations. Moreover, it was identified that tax
prepayments held by the Tax Authority and free reserves kept at the Czech
National Bank at zero interest rate create room for escaping from the policy.
Additionally, debt repayments in cash and interest-free accounts of government
and public institutions administrated by the Czech National Bank could lead to
undesirable advantages. A complementary VAR model analysis of the interest
rate transmission under negative policy rates was performed to evaluate quantitatively
the experience from European countries, however, short data series
available provided merely indicative results.