Jiří Rusnok: Currency, taxes and other institutes of financial law Welcome speech by Mr Jiří Rusnok, Governor of the Czech National Bank, at the Currency, taxes and other institutes of financial law conference, Faculty of Law, Charles University, Prague, 20 September 2018. * * * Good morning, everyone. It is an honour and a pleasure for me to welcome you to today’s conference on the currency, taxes and other institutes of financial law. The 100th anniversary of the foundation of the independent Czechoslovakia is a good opportunity to look back and identify the main features of our national economic history. As you know, we have been through four periods since 1918 – the period of political and economic emancipation from Austria-Hungary, the wartime economy, the era of central-planning-based totalitarian communism, and finally almost three decades of democracy and a market economy. So, more than enough has happened in our country over the last 100 years. Although these periods could not have been more different, two common features have appeared in various guises. I would characterise them on the one hand as economic moderation, prudence and discipline, and on the other as a struggle for economic independence and a willingness and ability to bear the consequences. Let me give some examples of both. Czechoslovakia’s founding fathers Tomáš Garrigue Masaryk, Karel Kramář and Alois Rašín were well aware that nurturing a sound financial environment was crucial to the prosperity of the young nation.
Such regulations are usually called into question by both the industry and the legislative authorities. BIS Review 113/1999  4  There is undeniably something to be said for their view of this matter as well. It is, moreover, easy to create the impression that the state by its control takes a special responsibility for the collateral in the bonds, which is not the intention. Perhaps one should also ask whether a gilt edge to the bonds would really give the effects hoped for. The large liquid securities with the best creditworthiness (AAA-rated) in the European mortgage market (Öffentliche Pfandbriefen) have in the first place collateral in loans to local governments or federal states and not in the market that the Swedish housing companies can use. They would rather issue “Hypotheken Pfandbriefe” with collateral in office premises and housing and both interest and liquidity are less favourable in the market. It does not seem either as if any uniform market for mortgages is in process of being established, but the regulatory framework differs considerably from country to country. Investors will hardly avoid making separate appraisals for each of these markets. Moreover, it seems, not wholly unexpectedly, as if EMU would affect developments in the direction from relatively rule-governed national markets such as the Danish and German to internationally open markets, where new instruments can be developed in a flexible way as the need arises.