Prague, April 27 (CTK) - The Czech government today approved an amendment to the law on banks which would enable the state to take over a bank that would run into serious problems, outgoing Prime Minister Mirek Topolanek said at a press conference after the cabinet meeting.
The bill, which reacts to the economic and financial crisis, simplifies the process of an increase in a bank's capital and enables the central bank to respond to banks' problems more flexibly, for instance.
But the measures are not a response to a specific problem in the banking sector, the Finance Ministry said.
The amendment introduces the so-called bridge bank which should enable a fast transfer of a bank in troubles to a healthy institution.
Such a transfer should be made for compensation which will be set on the basis of an independent assessment.
The bill enables the state to take over a problem bank as a measure of last resort through the so-called special purpose bank, that is a bank hundred-percent owned by the state.
This procedure would be applied especially if there was no bank on the market which would be willing to take over the troubled company.
The bill also contains a number of other specified steps which enable the Czech National Bank (CNB) to react more flexibly to the situation in a specific bank.
The central bank can prevent a bank from making decisions that would have a negative impact on its financial stability or its clients' interests thanks to the amendment.
A simpler process of a hike in a bank's capital should then enable the bank in problems to obtain the lacking capital as fast as possible in a flexible way.
The cabinet today also approved an amendment to the law on insurance and financing of exports with state support enabling commercial banks to provide export loans with state support, Topolanek said.
The change in the law, on which the Industry and Trade Ministry cooperated with the Finance Ministry, is part of the cabinet's anti-crisis plan.
The amendment means an exporter will be able to obtain a loan with state support not only from the Czech Export Bank (CEB), but also from commercial banks, outgoing Industry and Trade Minister Martin Riman said.
"Czech companies' access to export loans will improve significantly. I expect export loans will also be more accessible for small and medium-sized businesses which usually have stable long-term relations with banks," Riman said.
The amendment also extends the possibilities of insuring export and investment loans to foreign companies which are controlled by Czech firms.
The cabinet also approved an increase in the share capital of the state-run CEB by Kc650m in total in the first round. The CEB will be able to give more support to exporters thanks to the capital hike.
Topolanek said money from the government's budget reserve, the General Cash Administration and profit of state-run insurer EGAP will be used for the increase in the CEB's share capital.
The Finance Ministry is prepared to raise the CEB's share capital by up to Kc2bn as part of the fight against the crisis. In the first phase, it should grow by Kc1bn this year, which could support projects worth around Kc25bn, according to the ministry's estimates.
The amendments are yet to be approved by the parliament and signed by the President into law.
The government today also approved an adjustment to the Panel programme of the Czech State Housing Development Fund (SFRB) financing thermal insulation of prefab houses, Regional Development Ministry spokesman Hynek Jordan has said.
The change, which is also one of the cabinet's anti-crisis measures, means houses other than prefabs will also have the possibility to get state support.
The cabinet also decided Pavel Dvorak will remain on the post of chairman of Czech Telecoms Office (CTU) Council for another year, Topolanek said.
Milan Simonovsky, Christian Democratic (KDU-CSL) deputy and former transport minister, will become a new member of the five-member Council, replacing Michal Frankl whose four-year term in office will expire in early May.
The government also approved a report on the activities and economic results of the Energy Regulatory Office (ERU).