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Možnosti řešení problematických aktiv komerčních bank
[Selective Approaches and Experiences with Problematic Assets in Banking Sector]

Author

Listed:
  • Miroslav Kollár
  • Luboš Komárek

Abstract

This paper analyses various approaches to dealing with problematic assets of the banking sector. These approaches include the establishment of an asset management company, capital injection and sale of the bank, purchase and assumption transactions, liquidation or bridge bank. All these approaches are evaluated with respect to Czech transformation experience and with respect to experience of other foreign countries. The paper concludes that the establishment of Czech Consolidation Agency (Czech Consolidation Bank, respectively) was the least suitable approach to dealing with problematic assets in the Czech banking sector during the period of the transformation. The paper furthermore suggests that other methods, such as the liquidation accompanied with deposit insurance payments, publicly assisted mergers and acquisitions, or finally privately or publicly assisted purchase and assumption transactions should have been used instead. The knowledge of these alternative approaches to weak-bank restructuring is supposed to guarantee that Czech authorities will not step up to establish a similar inefficient asset management company, should banking-sector problems emerge once again.

Suggested Citation

  • Miroslav Kollár & Luboš Komárek, 2009. "Možnosti řešení problematických aktiv komerčních bank
    [Selective Approaches and Experiences with Problematic Assets in Banking Sector]
    ," Politická ekonomie, University of Economics, Prague, vol. 2009(5), pages 601-621.
  • Handle: RePEc:prg:jnlpol:v:2009:y:2009:i:5:id:700:p:601-621
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    References listed on IDEAS

    as
    1. Calomiris, Charles W & Klingebiel, Daniela & Laeven, Luc, 2004. "A taxonomy of financial crisis resolution mechanisms : cross-country experience," Policy Research Working Paper Series 3379, The World Bank.
    2. International Monetary Fund, 1999. "Recapitalizing Banks with Public Funds; Selected Issues," IMF Working Papers 99/139, International Monetary Fund.
    3. Akiko Terada-Hagiwara & Gloria Pasadilla, 2004. "Experience of Asian Asset Management Companies (AMCs): Do they Increase Moral Hazard? - Evidence from Thailand," Finance 0410001, EconWPA.
    4. David Woo, 2000. "Two Approaches to Resolving Nonperforming Assets During Financial Crises," IMF Working Papers 00/33, International Monetary Fund.
    5. Ewa Balcerowicz & Andrzej Bratkowski, 2001. "Restructuring and Development of the Banking Sector in Poland. Lessons to be Learnt by Less Advanced Transition Countries," CASE Network Reports 0044, CASE-Center for Social and Economic Research.
    6. Nakamura, Richard, 2002. "The Big Cleanse: The Japanese Response To The Financial Crisis Of 1990'S Seen From A Nordic Perspective," EIJS Working Paper Series 149, Stockholm School of Economics, The European Institute of Japanese Studies.
    7. William R. White, 2004. "Are changes in financial structure extending safety nets?," BIS Working Papers 145, Bank for International Settlements.
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    More about this item

    Keywords

    banking; Czech Consolidation Agency; problematic assets;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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