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"The Influence of the Development of Reference Interest Rates in Choosing Investment and Debt Financial Tools for Corporations - Case of the Czech Republic in 1997-2002s"

Polák, Petr. (2007) "The Influence of the Development of Reference Interest Rates in Choosing Investment and Debt Financial Tools for Corporations - Case of the Czech Republic in 1997-2002s". Journal of Emerging Markets, 12 (2). p. 15.

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    Abstract

    This paper focuses on the development of reference interest rates in the Czech Republic after the currency crisis of May 1997 and covers the period to the years 2002/2003 (that is to the time just before the country’s entry into the European Union) when the currency exchange of the Czech koruna (CZK) and interest rates were stabilised. The relatively high volatility of Czech reference interest rates in the late 1990’s influenced the development of company debt financing, forcing companies to become more sophisticated and dynamic in their use of debt instruments and hedging tools as they attempt to manage the subsequent interest rate risk. In this paper, the situation in three model corporations is also described – the first, a solvent company with a foreign owner (Moravian-Silesian Heating Company – MSHC, renamed to Dalkia Morava in 2002), the second, a solvent company with the Czech state as its majority owner (North Moravian Power Company – NMPC), and the third with domestic capital, which had economic problems during the given period (Vítkovice, a.s.), plus a big insurance company as a specific and very important institutional investor in domestic financial markets.

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    Item Type: Article
    Uncontrolled Keywords: Reference interest rates; interest rates hedging tools; bonds; commercial papers; yield from financial operations; cost of external financing.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Countries > Czech Republic
    EU policies and themes > Treaty reform > enlargement
    EU policies and themes > Policies & related activities > economic and financial affairs > general
    EU policies and themes > Policies & related activities > economic and financial affairs > business/private economic activity
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 28 Feb 2008
    Page Range: p. 15
    Last Modified: 15 Feb 2011 17:48
    URI: http://aei.pitt.edu/id/eprint/7545

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