11th February 2013

Bill on CNB (Czech National Bank) approved

The Chamber of Deputies passed amendments to the Act on Czech National Bank (CNB) (zákon o České národní bance) in the first reading. The amendment proposed by the Ministry of Finance reflects objections of the European Central Bank regarding to the institutional independence of the CNB. The amendment also introduces measures of the CNB’s role in promoting financial and monetary stability.
First, the ECB claims that the Chamber of Deputies must not ask the CNB for monetary overview reports. The Government had rejected that objection of the ECB as “concealing the transparent and accountable role of the CNB within the state”. The Government emphasizes satisfactory independence of the CNB (the amendment also expects independence on the EU-institutions). Second, the amendment stipulates the role of the CNB in supervising the financial and monetary stability and security of the financial sector in the Czech Republic. The CNB should also promote macro-economic goals of the EU (according to the Treaty on the Functioning of the European Union).

The Bill is heading to the Committee on Budget. For further information, click here (explanatory report).

The Chamber of Deputies also passed the organic Act on Budget Responsibility (zákon o rozpočtové odpovědnosti, the so-called finanční ústava) in the first reading. The Bill introduces a mechanism that should be triggered when reaching limits of state budget indebtedness. The opposition has objected to the limits and claimed to adjust them (according to the Bill, the limit indebtedness of public sector is about 60 per cent of GDP). The Minister of Finance admitted the willingness to adjust the limits. The opposition also claimed to postpone the discussion till implementary regulations will be prepared. According to the Ministry of Finance, however, the implementary regulations are currently in the internal commentary procedure.

For further information, click here.

The Chamber of Deputies passed the governmental proposal of the Act on Investing Companies and Investing Funds (zákon o investičních společnostech a investičních fondech) in the first reading on 6 February. The Bill regulates the collective investments and stipulates foreign model of administration of such activities. According to the Bill, the investment management should take care of portfolio and risk management. The investment administration should provide with administrative activities of such funds.
The Bill is heading to the Committee on Budget.

For further information, click here (explanatory report).

Members of the American Chamber of Commerce in the Czech Republic