Monitoring a suitable set of early warning indicators is crucial for the optimal timing of macroprudential measures aimed at reducing the risk of financial crises or at least mitigating their impact on the economy. This article sets out to identify the indicators that should be monitored and to...

This article discusses the experience of countries hit by debt crises as well as the channels of contagion of sovereign default risk to the financial system. It focuses primarily on identifying channels of contagion that might represent a relevant threat to the Czech economy and discusses their...

The purpose of this article is to contribute to the modelling of the cross-sectional dimension of systemic risk. First, the network of financial linkages in the Czech economy is mapped and then a model of inter-sector transmission of financial contagion is presented. The model is used to...

The crisis has brought the issue of regulating large, complex and highly interconnected financial institutions back into the spotlight. Supervisory and other competent authorities have discovered that they have only limited ways of preventing an idiosyncratic shock in one institution from...

This article is concerned with the regulation of banks on the basis of theirdifferent degrees of systemic importance. It proposes a specific approach to calculating a bank's systemic importance to the domestic banking sector. The article goes on to propose a method for assessing the additional...

This article sets out to describe an expanded and refined framework for stress testing the household sector. In contrast to the original tests conducted by the Czech National Bank since 2011, the new framework incorporates modelling of transitions between employment and unemployment at the level...

This article examines the extent to which housing prices affect the balance sheets and borrowing and consumption decisions of households in the Czech Republic and indirectly also their ability to repay their debts. Empirical results were obtained by applying the Propensity Score Matching (PSM)...

This article aims to characterise the effect of demand and supply factors on bank loans to non-financial corporations and to obtain a forecasting model for the main variables linked with corporate loans. Our estimate of credit supply conditions in the Czech Republic echoes the results of the...

As the two-way interaction between the financial sector and the government sector grows, so does the dependence between financial stability and fiscal stability. The high creditworthiness of government debt represents both a significant source of certainty for the financial system and a solid...

This article examines procyclicality of the financial system. The introduction describes the natural and regulatory sources of procyclicality, focusing on the potential procyclical effect of the current Basel II regulatory framework for banks. It also mentions the regulatory tools for mitigating...