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How Financial Markets Assess the State of Major Economies
Němeček, Josef ; Jílek, Josef (advisor) ; Czesaný, Slavoj (referee)
In accordance with its main goal, the main thesis shows which published data and indicators contemporary financial markets use to assess the state of major economies and forecast their short-term future development. Using Bloomberg as the primary source, the thesis provides a detailed analysis of the indicators and surveys sought by finance professionals when assessing the performance of the economy in the United States, the euro-zone (with emphasis on Germany) and, in the context of the impact on the global economy and markets, in China and Japan. A preliminary hypothesis about the similarity or closeness between the theoretical view and the practical approach of financial markets has been refuted. Instead, after close scrutiny and detailed analysis, we have established that financial markets put great emphasis on forward-looking indicators and monetary policy. This emphasis was confirmed by a survey of local investors. Using expert opinion and analysis, the thesis charts an overview of select economic indicators and their over- (payrolls, consumer sentiment) or undervaluation (regional Fed activity indexes, CFNAI).
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Does 'news' approach outperform monetary model in exchange rate determination?
Weichetová, Lenka ; Jílek, Josef (advisor) ; Štěpánek, Pavel (referee)
This thesis aims to contribute in the field of exchange rate determination. Firstly, it sums results of previous studies (theoretical as well as empirical ones). Consequently, it investigates two approaches to exchange rate determination, and compares their theoretical and empirical performance. Firstly, monetary model is introduced, and secondly 'news' model is presented. Since 'news' model incorporates rational expectations and considers interest rate endogenous, it is expected to give better results in comparison with monetary model. Six exchange rates were chosen for the empirical analysis. They are analyzed in period July 2000 -- June 2012. As expected, 'news' model outperforms monetary model. However, since the volatility of exchange rate is much bigger in reality than both of the models are able to explain, neither of the models can be considered as satisfactory. It is the same result which has been presented in older studies that investigated these models.
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Rating agencies and their importance for financial markets and economic policy
Svačina, Lubomír ; Jílek, Josef (advisor) ; Pícl, Michal (referee)
This paper performs an analysis of rating agencies and evaluates their importance for financial markets and economic policy. The importance of rating agencies and their ratings is assessed based on two criteria -- independence and accuracy of ratings, both criteria are analysed in detail from different views throughout this paper. Independence of rating agencies is considered in terms of historical context and the most important development milestones and trends, in terms of market positioning and demand for services of rating agencies, in terms of ownership structures and financing models. Accuracy of ratings is considered by historical analyses of sovereign ratings from the times of the Asian financial crisis, the European debt crisis and sovereign debt defaults and restructuralisations since 1990. In the issue of independence, the paper has revealed several risk factors, mainly in relation to financing model "issuer pays". In the issue of sovereign rating accuracy, the paper has come to a conclusion that rating agencies were only able to identify the most visible negative trends -- defaults and restructuralisations of debts in countries, where the problems had developed gradually. On the other hand, in surprising and sudden cases such as the Asian financial crisis and the European debt crisis, rating agencies were suprised just like the wider investor's public.
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The Factors that Influence the Relationship between Money Supply and Inflation
Holoubek, Lukáš ; Jílek, Josef (advisor) ; Štekláč, Jiří (referee)
The aim of the thesis is to evaluate the factors that influence the relationship between money supply and inflation and to determine how these factors show over time. The work is based on the current knowledge of the quantity theory of money based on the synthesis of monetarist and new keynesianism approach. The main starting point of this thesis is the fact that there is a widening of the gap between money supply growth and inflation. In the thesis were observed the factors that influence the money supply, velocity of money and inflation. These factors are for exapmle political decisions, greater concentration of wealth in society, uncertainty in financial markets and the possible impact of the shadow economy and the increasing importance of sharing economy. The result of this thesis was the finding that in case of no significant change in the current system, the widening of the gap between the money supply growth and inflation will continue.
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The Methods of Improvements of Financial Statements of European Banks: The Issues of IFRS And Its Influence on The Economy
Vlasáková, Andrea ; Jílek, Josef (advisor) ; Hájek, Jan (referee)
This thesis deals with methods of improvement of financial statements of European banks and their impact on the economy. The financial statements are the principal information source used by external users when making economic decisions. The thesis is focused on analysis of impairment of financial assets and insufficient creation of provisions for credit losses, on faire value and amortized cost measurement of financial assets, macrohedging of interest rate risk, reporting of goodwill and on derecognition and transfer of financial assets. The thesis investigates major differences between US GAAP and IFRS. Initial hypothesis are set down at the beginning of each chapter. These are confirmed after the analysis of the academic literature, primary resources and empirical data. The thesis confirmed the principal assumption that financial reporting under IFRS provides to European banks several ways how to improve their financial statements, which contradicts to the requirements of fair and true view of economic situation of entities. Low-quality financial information can lead to instability of the financial markets, which does not contribute to the economic growth.
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Economic and social aspects of overindebtedness of households in Czech Republic after 2000
Švec, František ; Jílek, Josef (advisor) ; Řežábek, Pavel (referee)
The thesis deals with the issue of excessive debt of households. In the first part the analysis of development of indebtedness of households was made and it was found out, that consumer loans are the most risky. Consumer loans are associated with the highest ratio of defaulting loans and are the leading cause of bankruptcies of individuals in the Czech Republic. The following chapter analyzes institutional environment of credit market and detects current weaknesses. These weaknesses consist in insufficient oversight of nonbank provider of consumer loans, absence of upper limit of annual percentage rate for consumer credit and credit availability to risk groups of households. Another cause of overindebtedness of households is insufficient financial literacy in Czech Republic. The reduced consumption has been identified as the most significant impact of overindebtedness of households. It is caused by transferring funds from households with a higher propensity to consume to households with a lower propensity to consume. Lower household consumption leads also to lower government revenue collected through the value added tax. Another economic impact we can see for example in increasing poverty of households, increasing criminality, higher government spending on health care or potential political radicalization. The thesis results are proposals of legislative measures that would mitigate the economic impact of overindebtedness of households. These measures lie primarily in the regulation of consumer credit market and greater consumer protection. The specific options are an extension of supervision by the Czech National Bank on nonbank providers of consumer loans, determining the upper limit of annual percentage rate, more thorough application of the legal obligation to examine the ability of borrowers to repay loans. Another option is to reduce the limit of 30 % of paid-up commitments in insolvency law.
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Unconventional measures implemented by ECB since the beginning of the last world financial crisis and their impact on the market valuation of the euro area banking sector
Šumbera, Jan ; Jílek, Josef (advisor) ; Loužek, Marek (referee)
Thesis brings broader picture about the relationship between unconventional measures implemented by ECB and valuation of banking sector in the Eurozone. It also examines implementation of unconventional measures with regard to the three crises, which struggled European economy in the years thereafter the beginning of the last financial crises. Attention is also directed towards factors which have direct impact on the valuation of banks and are influenced by steps adopted by monetary authority. For this purpose two stage dividend discount model, model of economic value added, and price to book ratio model are used. Main tools necessary for the analysis are databases of the platform Bloomberg and statistics gathered by ECB. Hypothesis suggesting the positive relationship between unconventional measures implemented by ECB and valuation of banking sector in the Eurozone is proved for mid-term horizon. In case of immediate reaction of shares the results are divided based on the structure of specific measure and also on the expectations of financial market. Thesis as a whole confirms the positive effects of unconventional measures on the valuation of shares, therefore entice to additional research. In fact sometimes monetary policy might cause distortion in the prices on the financial markets and endanger main goals of central bank.
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Vplyv dane z finančných transakcií na kvalitu trhu: Príklad Francúzska a Talianska
Šramko, Filip ; Jílek, Josef (advisor) ; Slaný, Martin (referee)
This thesis explores the impact of securities transaction tax (STT) on stock market quality. In order to identify the effects of STT on trading activity and market quality two recent STT introductions in France and Italy are analyzed. The effects are observed on panel data in four periods utilizing several trading activity and market quality measures. Following previous literature difference-in-differences approach is applied using various control groups including German and Spanish equities. The results point to significant decrease in trading activity and increase in bid-ask spreads in France following STT imposition. The impact on volatility is statistically insignificant across different specifications and estimation periods. The results for Italy are inconclusive due to possible contamination by political events, but the evidence indicates decrease in trading activity following STT introduction.
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Analysis of export support through ECAs in the world and in the Czech Republic
Vašíčková, Lucie ; Jílek, Josef (advisor) ; Štekláč, Jiří (referee)
The aim of the diploma thesis is to create a comprehensive description of the ECAs, to describe the way of working and the risks that the agency must take. ECAs have long history and are influenced by the many events that contribute to the current form of ECA. The last major event that affected the meaning of the ECA is the recent financial and economic crisis, thanks to which the agency gained an even stronger position than before. In the theoretical part of the diploma thesis will be summarized information about export credit agencies gained from existing bibliography. There will be described various models of ECA, the types of provided services and the risks which are connected with process of granting loans in this part. The analytical part will be focused on a detailed description of the selected export credit agencies. There will be analyzed their way of working, structure, types of products and the impact of the aid. In the conclusion, a comparison is made of selected ECAs using selected indicators. There will be summary of results gained from analysis in the conclusion of the thesis.
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Icelandic way out of crisis
Hendrych, Filip ; Jílek, Josef (advisor) ; Titze, Miroslav (referee)
This diploma thesis is focused on measures, which have been adopted in Iceland due to the crisis. The first part of the thesis follows up causes and a course of the Icelandic banking crisis in order to understand the situation which the Icelandic authorities had to respond. Subsequently there are outlined measures which are adopted and in the last part these measures are evaluated. Emphasis is placed on analysing the measures of capital controls, banking sector restructuring and fiscal consolidation. All measures have achieved their objectives and have had significant impact on current recovery. Therefore at the end of the thesis is discussed the possibility of these measures applicability in other countries.
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