1. An Impact of Institutional Environment on the Czech Banking Sector Petr Budinský Vice-rector VŠFS Conference Human Capital & Financial Management Prague, September 2012

2. SOLUTION OF DEBT CRISIS Political Union Fiscal Union Banking Union

3. ECB Decrease of interest rates LTRO 1 trln EUR Unlimited buy-out of bonds Banking union - 1 regulator - sharing risks

4. BANKING ASSETS in trln % of GDP Eurozone33 (EUR) 350 CR 4,7 (CZK) 125

5. BANKING LOANS % of banking assets% of GDP Eurozone33 124 CR4457

6. BANKS Worsening of loans Holding of bonds Losing deposits Capital requirements Fundings problems

7. DELEVERAGING + … Restructuring of assets Capital increase - … Restricting new loans

8. BANKS BEHAVIOUR Bonds purchases Stricter conditions for granting of loans Lower demand for loans

9. CNB EXPOSURE (in BLN´s of CZK) 200920102011 GERMANY124216,7283,4 ITALY54,117,94,8 IRELAND13,85,80,5 SPAIN60,611,16,7 GREECE14,80,10

10. SOCIETE GENERALE / KB EXPOSURE SOC. GEN. (in BLN´s of EUR) KB ( in BLN´s of CZK) GREECE2,97 SPAIN2,20 ITALY4,58,2 PORTUGAL0,40,2 IRELAND0,20

11. KBC / CSOB EXPOSURE KBC (in BLN´s FOND) CSOB (in BLN´s of CZK) GREECE0,53,06 SPAIN2,20,57 ITALY6,11,99 PORTUGAL0,40 IRELAND0,30