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The Czech National Bank Past and Present

Eight years after the publication of Professor František Vencovsky’s book on the history of monetary policy on Czech territory from the beginning of the 10th century up to the present, the Czech National Bank has decided to publish a book called “Central Banking in the Czech Lands”. Written by Jiří Novotný and Jakub Kunert, it covers the history of central banking since the establishment of the Czechoslovak Republic in 1918. With a print run of 2,500 in Czech and 1,000 in English, the publication will be made available to the public in the CNB special library and in regional, scientific and university libraries. As employees of the CNB Archive, both authors have specialised in banking history in their publication activities for many years.

The authors’ main aim was to outline the history of the Czech banking system and its supreme institutions, i.e. the central banks of issue, in the context of the genesis of the credit system in the Czech lands and Czechoslovakia. The first part of the publication therefore provides a concise history of the Czech banking system, starting with its first steps in the second half of the 19th century. It thus shows how the Czech banking system, built on the solid foundations of the burgeoning Czech “people’s financial institutions”, gradually assumed a key role in the credit system of the Czech lands and later also of Czechoslovakia. It also explains how the system operated in the shadow of occupation and at the time of the restored Czechoslovakia, when the banking sector was concentrated regardless of the real needs of the Czechoslovak economy. The authors chose 1950 as the end-date for this part of the publication, as this was when the State Bank of Czechoslovakia was created as a “mono-bank” incorporating the functions of both central and commercial banking. The authors tell the story of the banks operating in its shadow in a section devoted to the history of the State Bank of Czechoslovakia. This part also contains an explanation of the history of the bank of issue during the Hapsburg monarchy and short biographies of eleven prominent Czech bank managers.

The centrepiece of the publication, however, is an account of the history of central banking in the Czech lands and Czechoslovakia. In it, the authors try to trace the institutional development of the individual banks of issue, starting with the Banking Authority at the Ministry of Finance and ending with the Czech National Bank. The publication recounts how the newborn Czechoslovak state had to cope with the difficult monetary situation after World War I and what role was played by the Ministry of Finance’s Banking Authority in establishing the National Bank of Czechoslovakia. The foundations laid by the Banking Authority later became the pillars of the National Bank of Czechoslovakia established in 1926. The book then guides us through its entire history, with all the changes and upheaval caused by extraordinary economic and political events (the Great Depression, the occupation, the restoration of Czechoslovakia, the February 1948 coup d’état), which dramatically affected the whole of Czech and Slovak society. The authors try to paint as complete a picture as possible of an institution that played a significant role in the Czechoslovak and European context.

The following chapter is devoted to the State Bank of Czechoslovakia. Here, the publication concentrates on the bank’s organisational development between 1950 and 1993 and looks in more detail at some of its specific areas of activity, such as lending, monetary policy and the payment system and their changes. It also pays attention to the bank’s position in the planned economy. The section dealing with the Czech National Bank puts the main emphasis on the separation of the Czechoslovak currency and the State Bank of Czechoslovakia and goes on to explain the main functions of the independent central bank – the Czech National Bank. Rather than setting a specific end-date to which the publication should refer, the authors chose the broad framework of the end of the last century so that they could describe the main trends in the history of the Czech National Bank.

The main text is followed by two chapters providing a complementary view of the central bank. The first presents the leading representatives of the central bank in chronological order. The second recounts the changes that the central bank’s head office has undergone over its 90-year history, as well as its present form, and describes and presents the CNB’s current branches.

The book’s strong points include its high-quality graphic design and an attached CD containing all its illustrations in higher print quality as well as unique scanned documents from the CNB Archive documenting the bank’s history and nicely complementing the text of the book.

The publication endeavours to provide a comprehensive institutional view based on a detailed study of relevant legislation, of extensive archive documents (mainly from the CNB Archive) and of the literature. The authors strive to provide an objective view of the history of central banking in the Czech lands for specialist and layman alike.