The paper uses a dynamic inconsistency model known from monetary policy to assess three alternative proposals how to reform fiscal constitution in order to limit government’s incentive to use fiscal policy for maximizing political support. The return to ever-balanced-budget rule,...

This paper describes the stress-testing framework used in the Czech central bank and focuses on the general question of how to calibrate the models and parameters used to stress test the most important risks in the banking system. The paper argues that stress tests should be calibrated...

This paper describes the current stress-testing framework used at the Czech National Bank to test the resilience of the banking sector. Macroeconomic scenarios and satellite models linking macroeconomic developments with key risk parameters and assumptions for generating dynamic stock-flow...

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...

This article discusses the potential risks to price stability stemming from the influence of foreign direct investment on the economy. The analysis uses corporate data from a unique Deutsche Bundesbank database containing an almost complete sample of German enterprises that invested in the Czech...

This article presents the results of an analysis of data on individual bank loans of non-financial corporations in the Czech Republic taken from the CNB’s Central Register of Credits. It focuses on the question of how firms obtain financing from domestic banks. The results show that the...

Excessive credit growth is often considered to be an indicator of future problems in the financial sector. This article examines the issue of how best to determine whether the observed level of private sector credit is excessive in the context of the “countercyclical capital bufferâ€, a...