Leverage ratio and its impact on the resilience of the banking sector and efficiency of macroprudential policy

Basel III responded to the financial crisis by redefining and expanding the capital requirements for risk-weighted assets and by proposing the introduction of a leverage ratio which sets a minimum level of capital for banks in relation to total exposures. The capital requirement is being increased primarily through the active use of macroprudential capital buffers. As a result, it was proposed that the leverage ratio requirement should also take into account the level of capital buffers and thus become a macroprudential policy tool. This article examines the relationship between capital and leverage ratios and discusses the options for, and effects of, introducing a macroprudential leverage ratio. We find that the capital and leverage ratios complement each other and that the introduction of a macroprudential leverage ratio could, under certain circumstances, enhance the effectiveness of a macroprudential policy.Web of Science67429927

Cyclical-Adjusted External Balance of Goods and Services in the Czech Republic

Article develop the cyclical adjustment methodology of the balance of goods and services, which is beneficial especially for a small open economy. Cyclical adjustment procedure is applied and adjusted to the Czech data by quantifying cyclical determinants of foreign trade such as domestic and foreign output gap and trade prices deviations from the trend. Results show that cyclical adjustment of external trade balance provide a useful tool for assessing the sustainability of trade development and thus help to better analyze current situation and forecast short-term future development

Adverse consequences of economic policy in combating global climate change in the Czech Republic

The main aim of the article is to identify unintended consequences of economic policies to combat climate change, in the short and long run, using the example of the Czech economy. The short term impacts are assessed by world input-output analysis in order to capture direct and indirect channels affecting the Czech automotive industry. Optimistic, realistic and pessimistic scenarios of decrease in demand for cars due to the imposition of environmental taxes in the European Union and the rest of the world are presented. The results show adverse impacts on Czech gross domestic product from 1.6 to 4.9 percentage points. The economy is expected to change its structure and reallocate factors of production to an alternative use, but there is a risk of suboptimal allocation, which might reveal losses from less efficient allocation of labor and capital. Therefore, the analysis of the relationship between economic welfare and the quality of the environment is conducted. Data on the Czech economy confirm the hypothesis of an environmental Kuznets curve and point to unintended consequences of overly ambitious policies to mitigate global climate change. If economic welfare excessively declines, there would be a significant risk of undermining people's will to invest into environmental protection

Relationship between parental locus of control and caries experience in preschool children – cross-sectional survey

Background: Due to high prevalence and serious impacts, childhood caries represents a public health issue. Behavioural risk factors such as locus of health control have been implicated in the development of the disease; however their association with childhood caries has not been thoroughly studied. The aim of this cross-sectional survey was to assess the relationship between parental locus of health control and caries experience and untreated caries of their preschool children in a representative sample in Czech Republic, adjusting for relevant sociodemographic characteristics. Methods: A representative sample of 285 preschool children and their parents was recruited. Study data included children's dental status recorded in nurseries and parental questionnaires with 13 attitudinal items regarding locus of control (LoC) in caries prevention. The association between parental locus of control and children's caries experience and level of untreated caries was analysed using logistic regression, adjusting for the effect of key sociodemographic variables. Results: There was a statistically highly significant linear trend between increased parental LoC and higher probability of the children to be free from untreated caries, independent from the effect of sociodemographic variables of children and parents. A similar highly statistically significant trend, although not entirely linear, and independent from sociodemographic variables was observed with respect to the chance of the children to be free from caries experience with increasing strength of parental LoC. After full adjustment, children in the strongest parental LoC quintile were 2.81 (1.23–6.42, p< 0.05) times more likely to be free from untreated caries in comparison to the weakest parental LoC quintile and 2.32 (1.02–5.25, p< 0.05) times more likely to be free from caries experience in comparison to the weakest parental LoC quintile. Conclusion: The findings support the hypothesis that higher internal parental LoC is associated with better control of both untreated caries and caries experience in their preschool children and highlight that a more internal LoC within the family is advantageous in the prevention of dental caries

The Influence of Monetary and Fiscal Policy on Business Cycle

The purpose of this diploma thesis is to examine the impact of monetary and fiscal policy upon business cycle and the long term growth on the example of Swiss economy. The research approach is the analysis of monetary and fiscal indicators related with gross domestic product. Theoretical part explains business cycle theories, which consider cause of economic fluctuations in monetary and fiscal policy and further describes stabilization role of this particular policies and develop relevant problems within it. In practical part there is conducted research of monetary and fiscal influence upon Swiss business cycle with eligible indicators. The final part summarizes the most important knowledge and provides appropriate recommendations to reduce cyclical volatility of the product and to create a suitable economic and political framework for a functioning economy in the long term

Fiscal Policy and Debt Crises

Thesis deals with a fiscal policy issue with emphasis on the debt crisis. First specifics of the data capture of the government sector for the purpose of evaluating the fiscal position are analyzed. It includes assessment of the fiscal sustainability indicators and the historical reaction function of fiscal policy in the EU. The analysis of cyclical adjustment of the government balance, definition of fiscal impulse and the estimation of fiscal multipliers in the Czech Republic precedes the contribution to the debate regarding the optimal fiscal policy setup with respect to debt sustainability in the long run and sufficient degree of flexibility in the short run. The thesis concludes with the identification of the causes of the fiscal debt crises with the subsequent analysis of possible ways to resolve the already existing fiscal imbalances and assessing the appropriateness of the Czech government's consolidation

Sustainable development and its indicators

Tato bakalářské práce je vypracována na téma Trvale udržitelný rozvoj a jeho indikátory. Cílem práce je vytvořit ucelený pohled na problematiku udržitelného rozvoje, způsoby jeho měření a hlavně zjištění a zhodnocení stavu udržitelného rozvoje ve všech oblastech v České republice. V první části je vysvětlen udržitelný rozvoj v obecné rovině, jde zejména o kontext vzniku koncepce, definice a strategii České republiky. Druhá část popisuje význam a výpočet indikátorů, které slouží k měření udržitelného rozvoje. Závěrečná část obsahuje posouzení úrovně trvalé udržitelnosti v českých podmínkách měřené indikátory vysvětlenými v druhé části. Součástí třetí části je i zhodnocení stavu v přehledné SWOT analýze.The topic of this bachelor work is the Sustainable development and its indicators. The purpose is to create coherent view on sustainable development problems, ways of measuring and mainly on determination and assessment of sustainable development in all areas in the Czech Republic. The first part explains sustainable development in common level, it basically means context of establishment, definitions and strategy of the Czech Republic. The second part describes meaning and calculation of sustainable development indicators. The final part contains evaluation of sustainable development level in Czech conditions including the clear SWOT analysis.Ústav veřejné správy a právaDokončená práce s úspěšnou obhajobo

Systematic risk during 2008-2009 recession in emerging markets : some evidence from V3 and Baltic economies

The sudden and profound fluctuations in economic activity can lead to a systematic change in the component of asset risk return of capital market. It can be transferred when market agents adjust risk perception, resulting in significant changes in the development of real investments. The article analyses time-varying systemic risk at micro level. The methodology used in the research is based on the analysis prepared by Bali (2008), and Bali and Engle (2010), which were using the multi-dimensional GARCH model of average, providing the opportunity to evaluate the risk of both portfolios and individual problems in the US market. The analysis is intended for the Czech Republic, Hungary, Poland and the Baltic States. The results of the research show that the sensitivity of the change in assets to systemic risk is different, and changes were temporary. According to the results of the research, it is stated that in 2008-2009 the decline in economic activity should not lead to delays in investment. Since the information provided on the Eastern European economy is new, it is not possible to directly compare the results with results of other researches. Undoubtedly, the negative expectations of companies regarding the economic future had affected the cash flows of a particular investment project. and despite the fact that sensitivity to systemic risk remained the same as before the crisis, the investment to physical capital had decreased

Estimating Natural Rate of Interest and Equilibrium Exchange Rate: A Case of the Czech Republic

Article deals with estimating real natural interest rate and exchange rate to construct monetary conditions index suitable for the Czech open economy. Despite unobservable characteristics of underlying interest rates and exchange rate, the importance of reference indicators for monetary policy is crucial. Proposed monetary condition index in gap form examines monetary impulse on economic and credit cycle in inflation targeting model

Leverage Ratio and its Potential For Enhancing the Effectiveness of Capital Regulation

The article deals with the procyclical development of risk weights and hence the risk-weighted capital ratio. The leverage ratio should be included in the regulatory reform package (CRR2) as a (non-risk-weighted) prudential backstop. The article defines the complementary relationship of capital and leverage by describing their different responses to the cyclical development associated with the change in the quality of assets in the various phases of the financial cycle. The results of the panel regression on a sample of selected countries illustrate: (i) that the banking sectors with lower capital adequacy relatively more increased the capital ratio in the period of financial stress and more often changed the structure of the assets into less risky assets for the improvement of the capital ratio, with a negative impact on profit; (ii) significantly lower pro-cyclicality of the leverage ratio than the capital ratio