This article presents the results of stress tests of the Czech banking sector conducted using models of credit risk and credit growth broken down by sector. The use of these models enables the stress tests to be linked to the CNB's official quarterly macroeconomic forecast. In addition, the...

This article sets out to describe and discuss the methodology of selected financial soundness and financial stability indicators, including the attempts to construct an aggregate financial stability indicator. The article also presents to the public for the first time the values of the IMF's...

The subject of this article is stress tests, which constitute one of the key quantitative tools for the assessment of financial stability. Under one of the approaches, financial stability may be viewed as a situation where the financial system, inter alia, shows a high degree of resilience to...

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 describes a method for assessing the position of the Czech economy in the financial cycle. On the basis of selected variables tracking risks in the financial sector and the real economy, we construct an indicator aimed at signalling the emergence of future problems in timely...

From a general perspective, collateralisation of exposures is a key tool for mitigating the idiosyncratic risks of financial institutions. If, however, the use of collateral in the financial system exceeds a certain threshold it can pose a risk to financial stability. Collateral use is...

Developments in the commercial property market are an important factor affecting financial stability, especially given their effect on the probability of default of non-financial corporations. This article analyses the development of the office property markets in five central European countries...

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...

This article aims to open a debate on creating a macroprudential policy framework in the Czech Republic. It starts by describing how the CNB defines financial stability and what place macroprudential policy has within it. It then gives the sources of systemic risk and outlines the mechanisms...

This article analyses residential developments using a database of individual projects for the years 2006–2010. Changes in the supply structure towards smaller apartments in recent years were identified in this unique database. These changes were probably a reaction to higher demand for...