The Czech Banking System in the 1990s: Regulation and Supervision

The fundamental changes of the banking sector reform that involved breaking up the monobank system into a two-tier banking system occurred in an institutional and legislative environment tailored to the prevailing economy. There was not only an underdeveloped institutional framework, but also a legislative framework covering bankruptcy law, corporate law, laws protecting creditors as well as debtors, accounting standards, reliable auditor firms and so on. Therefore, it was subsequently recognized that the resolution in the first stage of transition was insufficient, and repeated rescue operations were needed.