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The Czech National Bank considers the final report issued by the parliamentary IPB fact-finding commission to be unbalanced and not entirely objective. The Czech National Bank is preparing a more detailed commentary on this report and will make it available to the public next week.

In order to analyse the situation prior to the collapse of IPB it is necessary to assess all the circumstances and to take into account the conduct of management and shareholders. It was this conduct which initiated the decisions made by the state in this matter. Furthermore, the report underestimates the fact that the Government and CNB were faced with the need to prevent the collapse of one of the three largest Czech banks in full private ownership. The major shareholders were willing neither to supplement the missing capital, nor to hand the bank over to the state without attaching other, unacceptable, terms and conditions. Had the situation not been solved immediately, the CNB would have been obliged by law to revoke IPB's banking licence, and the conservator would have had to close all its branches and to stop payments to clients. This fact - given all its economic consequences - was of fundamental significance for the state's decision-making.

The effort to draw from this analysis lessons for adjustments to the legal framework is undoubtedly useful. Moreover, one cannot disagree that the state is obliged to achieve the best possible terms and conditions in such a transaction. However, any attack on the transaction as a whole goes far beyond the framework of such an approach and could lead to a loss of legal credibility and to serious systemic problems. Directly or indirectly this in turn would lead to much higher costs for the state and taxpayers.

The not entirely comprehensive view of the situation and the emphasising of only some of the facts has led to an incorrect assessment of the state's approach to resolving the collapse of IPB and to the resolution adopted. Although the report calls into question some of the steps taken by the state, it does not suggest any alternative or better solution, despite detailed knowledge of the situation.

Pavel Palivec
Public Relations Division