Work detail

Credit Crunch - Theory and Czech Praxis

Author: Mgr.Tomáš Jaroš
Year: 2000 - winter
Leaders: † prof. Ing. Michal Mejstřík CSc.
Work type: Finance and Banking
Language: Czech
Pages: 80
Awards and prizes: Karel Engliš Award by Charles University Rector for the best diploma thesis
M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance and for an extraordinarily good masters diploma thesis
Abstract: This master thesis "Credit Crunch -- a theory and the Czech practice" generally deals with theoretical approaches to the credit transmission mechanism and its application to the Czech banking environment of 90's.

First part of this thesis summarizes well known financial theories of credit granting to private companies. It describes elementary models of financial intermediation with adverse selection and delegated monitoring as well as more advanced models that combine debt and equity financing of companies, whereas a Holmström-Tirol's model of financial intermediation is crucial from this perspective. Some alternative approaches are also briefly mentioned at the end of this part.

Second part first describes an evolution of the Czech banking sector in the economic transition. Bad loans granting by state owned banks to newly established companies without any relevant financial history was very usual for this period. The thesis further analyzes main trends in the development of bank loans in 1993-1999. At the end of this thesis, the author tried to apply theoretical models to the Czech practice in a qualitative manner. Main emphasis is especially given on problems such as asymmetric information, adverse selection, moral hazard and not well developed delegated monitoring that were very typical for the Czech banking environment in 90's.
Downloadable: Diploma Thesis - Jaroš


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