The Czech National Bank is the central bank of the Czech Republic and the supervisor of the Czech financial market. It is established under the Constitution of the Czech Republic and carries out its activities in compliance with Act No. 6/1993 Coll., on the Czech National Bank and other regulations. It is an entity governed by public law having its registered address in Prague. It is vested with the powers of an administrative authority to the extent stipulated by law.
It manages the assets entrusted to it by the state independently and with due diligence. Interventions in its activities are only permissible on the basis of a law. The supreme governing body of the Czech National Bank is the Bank Board, consisting of the Czech National Bank Governor, two Vice-Governors and four Bank Board members. All Bank Board members are appointed by the President of the Czech Republic for a term of six years.
Under Article 98 of the Constitution of the Czech Republic and Act No. 6/1993 Coll., on the Czech National Bank, as amended, the primary objective of the Czech National Bank is to maintain price stability. Achieving and maintaining price stability, i.e. creating a low-inflation environment in the economy, is the central bank’s ongoing contribution to the creation of conditions for sustainable economic growth. Central bank independence is a prerequisite for effective monetary instruments conducive to price stability. Without prejudice to its primary objective, the Czech National Bank also supports the general economic policies of the Government.
In accordance with its primary objective, the CNB sets monetary policy, issues banknotes and coins and manages the circulation of
currency, the payment system and settlement between banks. It also performs supervision of the banking sector, the capital market, the insurance industry, pension funds, credit unions and electronic money institutions, as well as
foreign exchange supervision. As a central bank the Czech National Bank provides banking services to the state and the public sector. It maintains the accounts of organizations connected to the state budget, including revenue and customs authorities, the Czech Social Security Administration, labor offices, subsidized organizations, state funds and accounts connected to the budget of the European Communities. Under authorization from the Ministry of Finance, the CNB conducts transactions relating to government securities. The Czech National Bank’s headquarters is in Prague. Seven regional branches are located in Prague, Ústí
nad Labem, Plzeň, České Budějovice, Hradec Králové, Brno and Ostrava.
The supreme governing body of the Czech National Bank shall be the Bank Board of the Czech National Bank (hereinafter referred to as the „Bank Board”). The Bank Board shall set monetary policy and the instruments for implementing this policy, and shall decide upon the fundamental monetary policy measures of the Czech National Bank and measures in the area of financial market supervision.
Furthermore, the Bank Board shall, in particular:
- set forth the principles for the activities and transactions of the Czech National Bank;
- approve the budget of the Czech National Bank;
- set forth the organizational structure and fields of competence of the organizational units of the Czech National Bank;
- define the types, amounts and uses of the funds of the Czech National Bank;
- execute the rights and duties arising from labor-law relations in respect of the staff of the Czech National Bank. The Bank Board may delegate these activities to other members of staff;
- grant its consent to the entrepreneurial activities of the staff of the Czech National Bank;
- fix the salary and other emoluments of the Governor; the salaries and other emoluments of Vice-Governors and other members of the Bank Board shall be fixed by the Governor;
- decide on appeals against the decisions of the Czech National Bank in the first instance;
The main functions of Czech National Bank:
- to maintain low and stable inflation;
- to ensure smooth circulation of money and smooth payments;
- to oversee the stability of the financial system;
- to support the balanced and smooth development of the Czech financial market;
- to achieve price stability and thereby maintain confidence in the value of money and the exchange rate of the Czech koruna;
- to care for the stability and development of the financial system and protect its clients;
- to ensure smooth payments and cash flows;
- to administer the foreign exchange reserves of the Czech state;
Useful links
- Currency of Czech Republic:
- Czech koruna
- List of Central Banks:
- Central Banks
- Official website of Czech National Bank:
- www.cnb.cz
- European Central Bank:
- www.ecb.int
- Tax Advisers in the Czech Republic:
- www.kdpcr.cz
- International Association of Insurance Supervisors:
- www.iaisweb.org