Czech National Bank
The Czech National Bank (CNB) is the central bank of the Czech Republic and the body that supervises the country's financial market. The Czech National Bank, established in 1993, is a legal entity governed by public law with its registered office in Prague. It is entrusted with the competences of the administrative authority to the extent stipulated by law, but it is not an administrative authority itself. He manages his own property. According to Article 98 of the Constitution of the Czech Republic and Act No. 6/1993 Coll., On the CNB, as amended, the main objective of its activities is to ensure price stability (earlier version of the Constitution before the so-called Euro amendment stated that the main goal was to maintain monetary stability). Achieving and maintaining price stability, ie creating a low-inflation environment in the economy, is a permanent contribution of the central bank to creating the conditions for sustainable economic growth. The precondition for the effectiveness of monetary instruments leading to price stability is the independence of the central bank. The CNB also takes care of financial stability and the safe functioning of the financial system in the Czech Republic.
The CNB also supports the general economic policy of the government, provided that this secondary objective does not conflict with the main objective. In accordance with it, it determines monetary policy, issues banknotes and coins in the currency of the Czech Republic, which is the Czech koruna, manages money circulation, payments and bank settlements, supervises the banking sector, capital market, insurance, supplementary pension insurance, credit unions and institutions electronic money. It also operates in accordance with the Act on the CNB and other legal regulations.
The main tasks of the Czech National Bank include:
Its declared role is to ensure the stability of the price index (which is not the same as price stability). The CNB seeks to fulfill this role within a monetary policy regime called inflation targeting. The CNB Board's decision-making on setting key interest rates is based on the current macroeconomic forecast and an assessment of the risks of non-compliance. By changing interest rates (ie producing money), the central bank influences the price of money on the market, thus trying to achieve a predetermined growth of the money supply and thus the chosen inflation. In the run-up to the euro area, inflation targets will be geared to meeting the Maastricht convergence criteria on price stability and long-term interest rates. Following the introduction of the euro, the CNB will abandon its separate monetary policy in favor of the European Central Bank.
Financial market supervision
In summary, ie. supervision of the banking sector, capital market, insurance and supplementary pension insurance, credit unions, foreign exchange supervision and supervision of electronic money institutions. The CNB lays down rules that protect the stability of the entire financial market. It systematically regulates, controls, evaluates and, if necessary, penalizes non-compliance with the established rules. The financial market supervision was integrated into one institution (the CNB) on 1 April 2006. The CNB thus took over the agenda of the former Securities Commission, the Office of State Supervision in Insurance and Supplementary Pension Insurance of the Ministry of Finance and the Credit Union Supervision Authority.
Currency issue and circulation
The Czech National Bank has the monopoly right to issue Czech koruna banknotes and coins (CZK), including commemorative banknotes and coins. It maintains a smooth and efficient money circulation, manages its money supply, withdraws from circulation and destroys worn-out banknotes and coins, and exchanges damaged money for new ones. Provides technical and artistic preparation of currency, their production and supply. Participates in the preparation of legal and technical protection of currency against counterfeiting