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This study examines the influence of the institutional environment on the Czech banking sector. It analyzes the effects of political, fiscal, and banking unions, as well as the ECB's interventions and banking assets and loans ratios. The study also explores the behavior of banks during periods of deleveraging and discusses the exposures of CNB, Societe Generale/KB, and KBC/CSOB.
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An Impact of Institutional Environment on the Czech Banking SectorPetr BudinskýVice-rector VŠFSConferenceHuman Capital& Financial ManagementPrague, September 2012
SOLUTION OF DEBT CRISIS • Political Union • Fiscal Union • Banking Union
ECB • Decrease of interest rates • LTRO 1 trln EUR • Unlimited buy-out of bonds • Banking union - 1 regulator - sharing risks
BANKING ASSETS in trln % of GDPEurozone 33 (EUR) 350CR 4,7 (CZK) 125
BANKING LOANS% of banking assets % of GDPEurozone33 124CR 44 57
BANKS • Worsening of loans • Holding of bonds • Losing deposits • Capital requirements • Fundings problems
DELEVERAGING+ … Restructuring of assets Capital increase- … Restricting new loans
BANKS BEHAVIOUR • Bonds purchases • Stricter conditions for granting of loans • Lower demand for loans