Grant detail

402/99/0606 (1999-2001) The Cultivation of the Financial markets in the Czech Republic

Principal investigator: PhDr. Vladimír Čermák
Collaborators: † prof. Ing. Michal Mejstřík CSc.
Description: One of important starting points was economic theory about contracts and the effort to reasonably limit the incompleteness of contracts within the valid legal framework, subject to economic rationality. In other words, it concerned economically justifiable and sensible re-shaping of the institutional environment in the field of financial markets in the Czech Republic. The attention of the solvers of the grant was was focused both on theoretical elaboration of the subject matter and on active participation in the process of amending key parts of legislation concerning financial markets.
For example in the area of bankruptcy law, it was possible, as a consequence of finalising research activities about the use of bankruptcy in the restructuring of firms, to apply the in practice hitherto rejected method of reallocating assets from ineffective to effective use, a method which is furthermore very economical from the point of view of state budget. Attention was also paid to the development of CEE financial markets as a part of newly emerging pan-European market.

Theoretical findings of grant were summarized into English written contributions of a book M.Mejstřík et al. "The Cultivation of Financial Market in the Czech Republic", Karolinum press, Praha 2003 (prepared) The lesson is learnt from the therapy of "Czech biased, bivalent form" of corporate governance issues that has still influenced maturation of the Czech financial sector. Institutional changes following "acqui communitaire", support of foreign investments and privatisation of remaining state banks were seen as a consensual policy point of departure. The privatisation of Czech state banks into hands of foreign controlled groups has been completed but only after cleaning banks´ balances from bad loans that has landed in state agencies and created huge burden for public budgets.The analysis of the development of new institutional framework in the banking sector indicates to what extend the inherent risks are covered with the goal of providing a lesson for other transitional economies.
Work in grant: Sestavení případové studie "Česká cesta privatizace a slehání bank - případová studie ČKD Praha Holding, a.s.".
Web link:
Finance: Czech Science Foundation (GA ČR).
End date: 12/2001

Mejstrik M., Privatization, Foreign Investment and Corporate Governance: Theory and the Czech Practise, Occasional paper IES 1999/1(in English)

Downloadable: Case Study ČKD Praha Holding


Česká Spořitelna


Patria Finance