An evaluation of financial sector restructuring in the Czech Republic

Er, Mevliyar (2001). An evaluation of financial sector restructuring in the Czech Republic. University of Birmingham. Ph.D.

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Abstract

The thesis focuses on the Czech banking reform, with the objective to analyse factors affecting its profitability and efficiency. These factors are reviewed in terms of corporate governance in banks and the Czech financial sector restructuring programme. Chapter One addresses the importance of the financial system and the extent to which banks in transition economies can fulfill pre-requisites for allocative efficiency. Chapter Two describes the Czech financial restructuring programme, in terms of its impact upon the structure of banks, the development of legal framework for banks. It points out the fact that the success of the structural-institutional economic reforms were to a great part undermined by political interests. Chapter Three is on methodological issues. It also analyses the performance of the sample banks based on ratio analaysis. Chapter Four provides an empirical examination of corporate governance within big banks, newly established small banks, foreign bank branches/subsidiaries, and privatized banks. While foreign banks are identified as best practice banks, domestic banks were found to lack control by owners. Significant improvements were observed at privatized banks. Chapter Five provides a critical evaluation of the restructuring programmes in terms of moral hazard. Chapter Six attempts, first, to estimate the degree of X-efficiency of banks in the Czech banking market and, second, by identifying the sources of cost and profit inefficiency by taking an econometric approach. In terms of the specific estimation technique both a Econometric Frontier Approach and Distribution Free Approach are applied. The chapter identifies that domestic banks were not worst performers. The final chapter gives a summary on the main empirical findings and shows avenues for further research.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):