G01 - Financial CrisesReturn

The paper analyses the relationship between excessive credit growth and the development of systemic risk, which subsequently materializes into losses of banking sector credit portfolios. The systemic risk indicator captures the time dimension of systemic risk, and hence represents the function of an indicator of the development of endogenous risk and imbalances in the system. The systemic risk indicator is thus a suitable leading indicator for the identification of the materialization of the risk of financial stress. In the paper, the credit to GDP gap for the domestic as well as the foreign component is chosen as the most suitable variable for the indicator. The results for each country confirm that the indicator is able to identify two to three years in advance the development of systemic risk and of systemic imbalances. Moreover, the results confirm the regional character of the systemic risk, when all of the countries realized an excessive growth mainly of the credit to households and mortgages, which moreover coincided in time.

The article addresses international regulation in the field of officially supported export credits. The author emphasizes differences between respective bank and insurance markets as well as differences between functioning of the respective commercial and state supported institutions. Analysis of the competition background at particular markets is followed by assessment of the legal regulation that limits export credit agencies´ operations with impact on Czech exporters´ competitiveness. Czech exporters suffer from partial disadvantage stemming from regulation at Organization for Economic Cooperation and Development level. At the European Union level were Czech exporters partially disadvantaged at the short-term insurance market during the financial crisis. On the other side, they can take advantage from above standard services that provides export credit financing market in the Czech Republic.

Problem of current world economy results from reality that we do not know to manage comprehensive complicated economic word with elements unrestrained randomness. Way to implement mathematics to economic science in not efficient, the same statement is valid about "risk based approach". Effort to normative prediction put on the periphery of interest ethics problems. Crisis provoked political pressure on extensity of regulation. Dilemma is: to support of naturally correct economic surroundings or strong regulation to restrict unethical behavior.Overcoming our cognitive insufficiency and finding new paradigm with anticipation of unrestrained randomness is very acute.

Natural response to the financial crisis is mostly increased regulation. This was happened in history, as well as in the global financial crisis today. The reasons for this usually lie in the fact that the one of the main considered direct causes of the crisis is insufficient or incorrect regulation or only way to prevent certain problems just seems to be regulation. This paper reflects whether the new regulatory measures introduced in response to the causes and effects of the global financial crisis (increase capitalization of banks, regulation of minimum bank liquidity, regulation of rating agencies, deep transparency of OTC derivatives, in particular and settlement of OTC trades through a central counterparty) can effectively prevent similar problems in the future. The author believes that further deepening of detailed regulation is not the way that can ensure a stable banks and entire financial system in the longer term. On the contrary, he considers as much more promising way the so-called macroprudential regulation, which would be of course gradually putting even greater emphasis on individual institutions own responsibility.

This article is focused on occurrence of speculative bubbles on the financial markets in the context of financial crises. The article explains the term of speculative bubble and offers several alternative explanations of speculative bubbles. An attention is paid to rational and irrational behavior of individual, crowd, market and psychological factors as well. There are in more detail discussed the circumstances of bubbles of 20th, 80th and the end of 90th of the last century and recent real estate bubble. At the end, a question whether the possibility forecasting of speculative bubbles occurrence on the financial market is mentioned.

Financial crisis has shown significant gaps in risk management system in financial institutions. The major critics focused on an inappropriate usage of the innovative financial products with not adequate reflection of capital requirements for their market risks, not adequate valuations of those products with reliance on external valuation by rating agencies, not transparent settlement via OTC and not adequate collateral management combined with the extreme financial leverage in those positions and unduly concentrations on the dozen counterparties. The proposed changes in regulatory regimes address major gaps in risk management system like the more stringent guidelines for liquidity risk management, the general increase of capital requirements and capital transparency on credit derivatives, securitization, etc. plus the abolishment of hybrid capital and the convertible capital from Tier 1 core capital; the more stringent requirements on risk models combined with the stress testing requirements to cover the extreme market events.

The article disputes against analysis of R. W. Bostic and K. O. Lee concentrated on federal homeownership strategy for building among low- and moderate-income families in the U.S.A. Authors find out emergency which is coming from new and more sophisticated mortgages However, in conclusion, they built on support from Fannie Mae and Freddie Mac. Both these institutions were put under the conservatorship on September, 2008.