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Omezení nabídky úvěru solventní otevřené ekonomiky v rámci implementace kapitálových požadavků Basel III
[Credit Supply Constraint of Solvent Open Economy within Implementation of Basel III Capital Requirements]

Author

Listed:
  • Naďa Blahová
  • Karel Brůna

Abstract

The article deals with constraint of credit supply consistent with external solvency of economy and solvency of banking sector under negative international investment position, foreign ownership of banking sector and growing bank´s capital and stable funding requirements. The target is to define main parameters of sustainable supply of funding of external capital providers and to test the relationships among determinants of external solvency, foreign sources of funding the economy and banking sector and credit aggregates in the Czech Republic using unrestricted ARDL ECM model. The results show growing inflow of debt funding motivated by export led growth, the Czech FDI investments and lack of euro liquidity due to CNB foreign exchange interventions. The debt provided by foreign parent companies could overcome a constraint of home banking sector´s credit supply. Growing export causes investments to production capacity financed by equity of foreign holders. The cost of negative NFA is driven by profitability of exporters which is positively correlated with GDP growth. The bank´s capital incl. reinvested profits do not reflect a credit cycle due to excess of capital in the Czech banking sector.

Suggested Citation

  • Naďa Blahová & Karel Brůna, 2017. "Omezení nabídky úvěru solventní otevřené ekonomiky v rámci implementace kapitálových požadavků Basel III [Credit Supply Constraint of Solvent Open Economy within Implementation of Basel III Capital," Politická ekonomie, Prague University of Economics and Business, vol. 2017(2), pages 141-160.
  • Handle: RePEc:prg:jnlpol:v:2017:y:2017:i:2:id:1133:p:141-160
    DOI: 10.18267/j.polek.1133
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    References listed on IDEAS

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    1. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    2. repec:fip:fedgsq:y:2005:i:mar10 is not listed on IDEAS
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    6. Iana Liadze & Ray Barrell & Professor E. Philip Davis, 2010. "The impact of global imbalances: Does the current account balance help to predict banking crises in OECD countries?," National Institute of Economic and Social Research (NIESR) Discussion Papers 351, National Institute of Economic and Social Research.
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    More about this item

    Keywords

    international investment position; solvency; funding; credit growth; ARDL ECM;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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