The CNB establishes an independent Financial Stability Department as from October

The Financial Stability Department will become a new independent organisational unit of the Czech National Bank as from 1 October 2010. This institutional change is in line with the international trend of strengthening the role of financial stability and macroprudential policy at central banks.

The new independent Financial Stability Department will be overseen by Bank Board Member and CNB Chief Executive Director Kamil Janáček. The establishment of this department and the transfer of financial stability experts to it from the current Economic Research and Financial Stability Department was approved by the CNB Bank Board. Jan Frait, currently Deputy Executive Director of the Economic Research and Financial Stability Department, will become Executive Director of the new department.

Financial stability has been one of the CNB’s main objectives for years now. In the wake of the financial crisis, the objective of financial stability and analysis of financial stability at central banks have increased in importance. Ways of incorporating a new pillar – macroprudential policy – into the set of financial stability instruments have started to be discussed at the global, European and national level.

“One of the main priorities of the new department is to bring the macroprudential policy framework closer in terms of sophistication and rigour to the framework in which monetary policy has long been implemented,” said Jan Frait.

The Financial Stability Department will focus on the existing analysis of financial stability and on stress testing of the financial system. In addition, it will engage in macroprudential regulation and macroprudential oversight, which are focused on analysing, assessing and mitigating systemic risk.

On 1 October 2010 the Economic Research and Financial Stability Department will return to the name it used until 2007 (Economic Research Department) and to its original primary mandate, i.e. responsibility for setting economic research priorities, coordinating research within the CNB and writing the minutes of monetary policy meetings. Kateřina Šmídková will remain Executive Director of the Economic Research Department.

Marek Petruš
CNB spokesman
 

Jan Frait

Born 28 November 1965 in Slavičín. He obtained his Master’s degree at the Faculty of Economics of the Technical University of Ostrava (VŠB-TU) in 1988 and completed his doctoral studies there in 1995. The same year he received the Young Economist of the Year award from the Czech Economic Society for his paper “Portfolio Model of the Balance of Payments (and its Application to the Czech Republic in 1992–1995)”. He has lectured at the Economic Faculty of VŠB-TU Ostrava since 1990. In 1998, he qualified as an Associate Professor in Economics at VŠB-TU Ostrava. In 2002, he was appointed Professor of Economics. From 1999 to 2007 he was a member of the Board of Directors of the Czech Economic Society (CSE) and from December 2001 to January 2004 he held the post of CSE President. He has long worked as editor of Finance a úvěr – The Czech Journal of Economics and Finance – and he has been a member of the Scientific Council of Charles University in Prague since 2006.

He has worked at the CNB since 2000. In December 2000 the President of the Czech Republic appointed him as a member of the Bank Board for six years. Since 2007 he has worked as an adviser to the Board and as Deputy Executive Director of the Economic Research and Financial Stability Department responsible for financial stability analysis. In this post he has represented the CNB in the European Central Bank’s Banking Supervision Committee.

Jan Frait is married and has one child.