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The Prediction of Economic Activity Growth by Sovereign Bond Spread in France, Germany and Great Britain

Author(s): Jana Hvozdenská / Language(s): English / Publication Year: 0

Keywords: bonds; slope; spread; yield curve;

The steepness of the bond yield curve should be an excellent indicator of a possible future economic activity. A rise in the short rate tends to flatten the yield curve as well as to slow down real growth the near term. The relationship between the spread and future GDP activity was proved already before. One question remains – which spread is the best for the future prediction? Is it the spread between sovereign 10-year bonds and 3-month bonds or 30-year and 1- year or 10-year and 1-year sovereign bonds? This paper aims to analyze which spread is the most suitable for predicting of future economic growth in France, Germany and Great Britain between the years 2000 and 2016. The natural and probably the most popular measure of economic growth is GDP growth, taken quarterly. We have found out that the best predictive spreads in France, Germany and Great Britain are the spreads of 30-year and 1-year and 10-year and 1-year government bond yields. These findings might be beneficial for investors and provide further evidence of the potential usefulness of the yield curve spreads as indicators of the future economic activity.

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Difference in Financial Knowledge of Finance Students in the Czech Republic

Author(s): Barbora Chmelíková,Martin Svoboda / Language(s): English / Publication Year: 0

Keywords: financial literacy; university students; financial education;

The aim of this article is to analyze the results of the study regarding financial literacy topics. The study was implemented at Masaryk University among the students of the Faculty of Economics and Administration. The paper presents the results of empirical study conducted in two consecutive years 2013-2014 testing the students’ knowledge in the areas of personal budgeting, numerical literacy, price literacy, payment methods, how to search for relevant information, breach of a contract and its consequences, indebtedness, right and obligation of consumers in the financial markets. The results of data gathered from the studies over the time enable an insight into the shift of the financial knowledge of the surveyed target group.

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The Use of Financial Advisory in Czech Republic: Self-confidence

Author(s): Věra Jančurová,Petra Formánková / Language(s): English / Publication Year: 0

Keywords: behavioral finance; financial advisory; overconfidence; self-evaluation; financial decision;

The study of behavioral finance and decision making, especially in finance, have grown on importance during last decades. There were conducted many studies of decision making at financial markets all around the world. This study was conducted to analyze financial decision making and behavioral characteristics of Czech population. The purpose of this study is to show how people in Czech Republic control their financial affairs; one of the studied areas is if they use the help of financial advisors, especially, if this is influenced by gender, the level of education or even by the self-evaluation of own financial skills and knowledge. There was conducted a field research based on electronic and printed questionnaire that was answered by 302 respondents. Based on the results of the testing it was confirmed that level of education is significant for both selfevaluation and the use of financial advisors. However the hypothesis that higher education level increase the probability of self-evaluation and decreases the need to use the help of financial advisors was not confirmed. One of possible explanation could be the overconfidence of individuals that is strongly shown by the sample; 70,52% of total respondents consider their financial knowledge better than average and only 3,32% of the respondents consider them worse than average. And only 29,6% pf the respondents use for their financial decisions the help of financial advisor.

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Mobile Technology on the Retail Banking Market

Author(s): Monika Klimontowicz,Karolina Derwisz / Language(s): English / Publication Year: 0

Keywords: mobile banking; mobile service suppliers; banking market; consumer expectations; mobile technology adoption;

For the last few decades, the retail banking market has been influenced by many economic, political, legal, technological and social factors. Mobile technology has changed both the information and communication sharing, and customers’ market behaviour. The social revolution has already happened and changed customers’ expectations concerning banking services. Today there are 2,6 billion smartphone subscriptions globally. It is estimated that by 2020 the number of smartphone users will reach 6,1 billion. Mobile phones haves increasingly become tools that consumers use for banking, payments, budgeting and shopping. Today they enable using a different kind of financial applications offered not only by banks but also by other providers as telecoms or FinTech enterprises. The increasing number of offerings makes the choice much more difficult for customers. The purpose of the paper is to presents global and regional trends relating to mobile technology application on the retail banking market, customers’ expectations and selected factors influencing the adoption of this technology. The paper includes desk research of existing data. The authors try to answer the question if the implementation of mobile technology on retail banking market means the future of retail banking or just new distribution channel.

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The Role of Accounting Policy in Management of Polish Hospitals

Author(s): Magdalena Kludacz-Alessandri / Language(s): English / Publication Year: 0

Keywords: accounting policy; hospitals; accounting rules; balance sheet policy;

The Polish accounting Act is not able to create an ideal accounting model for all organizations which carry out diversified activities in various economic conditions. Therefore, managers have the right to choose their own legally accepted accounting principles, in order to present a true and fair view of their financial results in financial statements. However, the freedom to choose accounting principles may also lead to use such tools of accounting policy that have a direct impact on the manner of recognizing revenues and costs and allow the creation of financial performance and other elements of financial statements. The aim of the article is to describe the essence of the accounting policy and analyze the use of selected instruments of material accounting policies in management of Polish hospitals that have impact on financial results and other components included in financial statements. The article presents the results of an empirical survey conducted in selected Polish hospitals in the years 2012 - 2013. The respondents gave information regarding various instruments of accounting policy used in their hospitals and evaluated their use in creating financial performance. The study showed that accounting policy is not the essential tool in the management of the hospitals in Poland. From one point it is good because it means that accounting policy isn't the tool of any manipulative practices in hospitals. On the other hand the managers don't use their possibilities and rights to choose the accounting methods to achieve the most desirable financial results. They don't try to optimize the financial statements of their hospitals using the instruments of accounting policy which don't violate the balance sheet law.

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Revenue Efficiency in European Banking

Author(s): Kristína Kočišová / Language(s): English / Publication Year: 0

Keywords: banking sector; revenue efficiency; DEA;

This paper analyses revenue efficiency of banking sectors in the European Union countries over the period 2008-2014. The Data Envelopment Analysis (DEA) method is applied. The results show decrease of the average revenue efficiency in the whole sample. The results of DEA analysis, by country, indicate that the efficiency ranged from 52.47% in case of Romania to 100% in case of Germany, United Kingdom, Netherlands, Sweden, Malta, and Luxembourg. The revenue efficiency was also analyzed in three groups of banking sectors, classified according to the volume of total assets. Large banking sectors seem to be most efficient, where the average revenue efficiency during the whole analyzed period was 97.11%. On the second place, there were banking sectors within the medium-sized group (85.3%) and the least efficient were banking sectors in the small sized group (71.6%). In the last part of our analysis there were determined four main European “regions” and the average revenue efficiency was analyzed within them. According to the results of analysis, levels of efficiency in case of Northern (89.4%) and Western European (89.5%) banking sectors were higher than the average in the whole sample (79.8%); on the other hand, the average revenue efficiencies in case of Southern (76.7%) and Eastern European (63.5%) banking sectors were under the total average.

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Impact of Transfer Pricing Regulation on MNEs' Behaviour

Author(s): Michal Kolář / Language(s): English / Publication Year: 0

Keywords: transfer pricing; safe harbour; Amadeus database; factor analysis; cluster analysis;

Tax administrations worldwide provide taxpayers with favour and offer them the opportunity to set up transfer pricing system according to pre-agreed criteria. When taxpayer´s system complies with, tax administrator does not dispute the transaction. Any predefined arrangement leading to the recognition of transfer pricing system by tax administrator can be defined as a safe harbour. During the review process of current sources, it was found out that there is no relevant research available focused on assessing the appropriateness of introducing safe harbour system for both businesses and government. At the same time even the OECD does not work with data that would conclusively prove the impact of transfer pricing regulation on companies´ behaviour. For this reason, a research was conducted in this area with focus on the potential of safe harbour to affect tax contributions of enterprises. Financial data were rendered from Amadeus database. The impact of safe harbour system was observed on the time series development of taxation of particular cluster. Cluster analysis was selected as the most suitable method for grouping companies.

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The Electronic Record of Sales and Impact on the Reduction of Tax Evasion

Author(s): Eva Kolářová,Eva Podolská / Language(s): English / Publication Year: 0

Keywords: revenues; electronic records of sales; tax; value added tax;

Tax evasion is a problem not only in the Czech Republic but in other countries as well. Combating tax evasion and more efficient tax collection is one of the priorities of the government. Implementation of Electronic Records of Sales will cut down shadow economics and ensure straightening of market environment. This implementation will affect most of business subjects. The research is based on a survey. It deals with electronic revenue registry and the impact of its introduction on small businessman, natural persons and micro legal entity. The aim of this article is to identify the attitude of surveyed subject on the Electronic Records of Sale implementation. Results of the research confirms that the entrepreneurs’ view of ERR differs from the view of non - entrepreneurial public.

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The Comparison of the Selected Aspects of Taxation in Visegrad Four Countries

Author(s): Jaroslav Kovarnik,Pavel Jedlička,Eva Hamplova / Language(s): English / Publication Year: 0

Keywords: GDP development; taxation; Visegrad Four countries;

Visegrad Four countries, namely the Czech Republic, Slovakia, Poland, and Hungary, share not only same geographical position in the Central Europe, but also similar history, and similar economic development. All countries were under the influence of Soviet Union, they went through the economic transformation in the nineties of the last century, they joined the European Union in the same year, and they also experienced the economic crisis. However, even if the economic development before crisis was similar in all analysed countries, the after-crisis development has been different, where some countries have been developing faster than the others in terms of GDP. The aim of this article is to analyse not only GDP development in Visegrad Four countries, but also analyse the development of selected aspects of taxation, namely tax collection and tax burden (more precisely tax quota). The authors analyse whether the development of mentioned tax problems corresponds with the GDP development or not. The analysis shows that even if the Slovakia has been developing in terms of GDP after crisis, there is the lowest tax collection and tax burden. Details of this analysis are described in this article.

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Alternative Investments in Voluntary Pension Security

Author(s): Patrycja Kowalczyk-Rólczyńska,Tomasz Rólczyński / Language(s): English / Publication Year: 0

Keywords: alternative investments; traditional assets; rate of return; risk; pension security;

Voluntary pension security plans play an important role in every pension system. Demographic changes in European countries cause that the value of pension benefits from the mandatory part of the pension system will be getting lower in the following years. This will have a significant effect on quality of life and consumption of retired people. In order not to increase the group of people at risk of poverty, one needs to increase the number of economically active persons who voluntarily save for their retirement. As part of the voluntary forms of pension security different products, mainly financial ones, are offered (often by banks, insurance companies, investment funds and pension funds). The contributions paid are invested mostly on the capital market (both safe and risky financial assets). However, on the market there are also alternative assets which in the long term can generate higher rates of return than investments in traditional assets. People who save money should consider including in the portfolio alternative assets which would affect also the diversification of the portfolio constituting voluntary pension security plans. Among alternative assets a special attention should be paid to real estate, gold, silver, arts, wine and whisky as well. In those types of assets investors can invest both directly and indirectly. The aim of the article is to assess the role which alternative investments play in voluntary pension security on the Polish market. To achieve that purpose, statistical methods, such as for example correlation coefficient, are used to assess the relationship between characteristics of describing alternative and traditional assets.

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Impact of the Interest Rates in the Economy, the Banking and Financial System

Author(s): Jan Krajíček,Bohuslava Doláková / Language(s): English / Publication Year: 0

Keywords: liabilities; profit; rates; risk; management;

The continued decline of interest rates, pointing to negative interest rates is reflected in the economy, banking and financial sector. The decline in interest rates would itself be a problem for banks, such as resources grow in the banking sector. Growth in deposits not only in banking, but in the financial sector, and has its consequent reflection in both the declining risk aversion and the need to create new products and services. The main reason for their creation is the need to secure the necessary amount of profit. Similarly, the decline in risk aversion is also reflected in the design of new products, where risk is transferred to raise immediate profits.

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Accrual Accounting in the Army of Great Britain - Clarity, Transparency, and Accounting Data Analysis Options

Author(s): Miroslav Krč,Vladimír Golik,Jana Vodáková / Language(s): English / Publication Year: 0

Keywords: resource accounting and budgeting; effective allocation; resource / capital; annually managed expenditure;

The article "Accrual accounting in the Great Britain army - clarity, transparency, and easy accounting data analyze" analyzes the application of the accrual accounting and resulting consequences of the introduction of resource accounting and budgeting in the Great Britain Armed Forces. The analysis was based on the selected financial statements: Summary of Resource Outturn; Operating Cost Statement, Balance sheet. The horizontal analysis was used to analyze trends of the changes on the annually managed expenditure limits during the period of RAB implementation. The Great Britain army was monitored as a business. Analyzed reports show data for the current and last year. Using data from individual years there was calculated the increase in absolute terms and as well as in percentage terms (growth rate). The original absolute data from financial statements are monitored in certain contexts. Analysis of the trends examined the changes of absolute indicators over time. Change is expressed in percentage or index. How many units of the item has changed over time? (Absolute change) and how many percent of the item has changed over time? (Percentage change). In the horizontal analysis we measured the development of selected items of expenditure limits and capital resources (Resource / Capital DEL) and Annually managed expenditure (AME).

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The Impacts of the Directive No. 2013/34 / EU Transposition into National Accounting Modifications in the Czech and Slovak Republic

Author(s): Michaela Krejčová,Milena Otavová,Jana Gláserová / Language(s): English / Publication Year: 0

Keywords: European Directives; accounting entity; accounting principles; financial statements; Czech and Slovak accounting system;

The obligation of all EU Member States was to implement Directive No. 2013/34 / EU on the annual financial statements, the consolidated financial statements and related reports of certain types of business corporations. The implementation of Directive No. 2013/34/EU was the duty for all EU state members no later than 1. 1. 2016. Member states have acceded to this obligation differently, since the Directive has in some areas only recommendatory character. The goal of this article is therefore to identify the differences; and then evaluate the impacts of the directive transposition into national accounting adjustments in the Czech and Slovak Republic. The main focus is primarily the classification of accounting units by their size and the subsequent determination of their accounting obligations. Based on the identified differences the conclusions for the users of financial statements with respect to their economic and financial decisions will be also determined. The starting point of the paper is processing a comparative analysis of the Accounting Act, including implementing regulations in the monitored countries. The identified differences will provide a basis for an appraisal of level of implementation of the directive into national accounting adjustments for these countries. The impact on reporting framework for micro, small, medium and large enterprises will also be defined including links to basic accounting principles - in particular a true and fair picture of the accounting and principle of prudence.

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Stock Market Volatility in the European Emerging and Frontier Markets

Author(s): Lumír Kulhánek / Language(s): English / Publication Year: 0

Keywords: emerging markets; frontier markets; volatility; stock market return; risk;

The main objective of this paper is to investigate and evaluate development both of stock market returns and volatility in the European emerging and frontier markets. Both main quantitative characteristics of the stock markets development will be analysed (daily returns, risk), as well as the relationships between daily stock market indices returns changes and volatility. The comparison with developed stock markets and MSCI European Union index is also performed. In analysis are used daily values of stock market indices for the sample period from May 2002 to May 2016, which is also divided into two non-equal length sub periods with the beginning of the Euro area sovereign debt crisis. We found that only three frontier markets of the European Union have positive returns both in pre-crisis and crisis period. The emerging stock markets in comparison with frontier markets are reasonably highly correlated with each other and with MSCI European Union index. Very weak correlations of frontier markets of the European Union furthermore decreased in Euro area sovereign debt crisis period.

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Perspective of Sustainability of Fiscal Policy in Czech Republic

Author(s): Dušan Litva / Language(s): English / Publication Year: 0

Keywords: fiscal policy; sustainability; prediction; SFP;

Each country entering monetary union automatically gives up one of key macroeconomic tool- monetary policy. Hence second tool which is fiscal policy has increasing influence and significance. In this papers are discussed in theoretical part basic principles of fiscal policy, its tools and possible consequences of use. Emphasis is put on derivation of theoretical relationships using Wickens approach which is based on general dynamic equilibrium in economy and its application on evaluation of sustainability of fiscal stance. Needed data for model construction are inflation, GDP, and debt to GDP ratio. In this article was used data prediction of IMF for Czech Republic for period 2015- 2020 for formulation of hypothesis for sustainability of fiscal policy. For expression of degree of sustainability was established SFP index while comparing Czech Republic with other chosen countries. Based on predicted data fiscal policy of Czech Republic seems to be sustainable for explored period. Key drivers for this result are high and stable predicted growth of GDP, stable and low predicted inflation, but mainly decrease of overall predicted debt (resulting in decrease of debt and GDP ratio as a result of cumulative surpluses of government budget).

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Interrelation between Concentration in Banking Sector and its Main Performance Indicators: Case of Russia

Author(s): Rogneda I. Vasilyeva / Language(s): English / Publication Year: 0

Keywords: bank; market structure; concentration; assets; liabilities;

The research is aimed at determining the interrelation of Russian banking sector concentration for most assets and liabilities in 2008-2015 with its main performance indicators, such as Return on Assets, Return on Equity and Capital Adequacy. We used a set of indices from the industrial organization theory to evaluate the level of concentration and unevenness in Russian banking sector and proposed the method of Herfindahl-Hirshman index decomposition to separate concentration caused by reduction in number of banks and by growing heterogeneity in banking sector. Having tested 4 statements concerning correlation between banking sector concentration and its main performance indicators, we have not found any functional connection between a particular bank share in total capital or assets and its performance, but revealed positive influence of concentration in banking system as a whole on its performance both at a snapshot and in time series. Additionally, we recognized a relatively negative contribution of small and medium-sized banks to Russian banking system's efficiency in the period of recession, whilst during recovery they, though being less effective than larger banks, form a zone of stability. Taking into account the support given to large banks by the state, we still bear in mind not only natural but also artificial origin of such a result. Finally, we state the need of effective control over the structure of the banking system.

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Risks and Efficiency of Tax System at Different Budget System Levels: Revenue Formation and Sharing in the Russian Federation Regions

Author(s): Rogneda I. Vasilyeva,Rodion Vladiirovich Balakin / Language(s): English / Publication Year: 0

Keywords: tax system; budget; region; Markowitz portfolio theory; risk; profitability; Sharpe ratio;

The research is aimed at analyzing tax systems at the stages of tax revenue formation and its distribution among different budget levels to compare risks and efficiency of tax systems. H. Markowitz portfolio theory is applied to the tax system risk assessment. The deflation of tax revenue and regional gross product (GRP) was employed to adjust the price scale of the analysed time series. The ratio between the tax yield to GRP applied to 8 basic taxes and tax groups was viewed as the profitability of the ‘tax portfolio’. For evaluation of the tax risks we used the intertemporal standard deviation of tax yield ratio to GRP. In order to identify the influence of tax variance and tax covariations on general risk of the tax system at the stages of tax revenue formation and its distribution, decomposition method of tax portfolio risk index is used. W. Sharpe ratio is employed to assess the efficiency of a tax system, on the assumption that riskfree return equals zero. According to the results obtained, Russian tax system shows the highest risks and profitability rates at the stage of federal budget formation, whereas the risks and yield rates of the regional consolidated budgets are lower. It works the same way when it comes to regional tax return’s distribution among regional and local budgets. However the tax system efficiency, according to the calculated Sharpe ratio, at a regional level generally compares favorably with that at the federal or local levels. The policy of interregional inequalities levelling forms the basis of tax return distribution among different budget levels. Hence the federal level shows the highest rate of interregional inequality of tax system efficiency, while regional level is characterized by a lower rate, the lowest one found at the local budget level.

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Analysis of the Relationship between Adopting and Using XBRL as a Reporting Language for Small and Medium Sized Entities and the Development Status of the Country and the Existence of XBRL Jurisdiction

Author(s): Anton Marci,Zuzana Juhászová / Language(s): English / Publication Year: 0

Keywords: XBRL; XBRL taxonomy; extensible business reporting language; SMEs; small and medium-sized enterprises;

The aim of the paper is to explore possible relationship between adopting and using XBRL as a reporting language for small and medium sized companies and development status of the economy and to explore possible relationship between adopting and using XBRL as a reporting language for small and medium sized companies and the existence of XBRL Jurisdiction. Methodology used in the research project is focused on the current experiences of using XBRL by insurance and banking sector companies and by companies in other sectors with accordance to regulations for insurance and banking sector companies and for small and medium sized enterprises in European Union member states. Research is then focused also on the existing relationship between XBRL usage and the development status of the economy and other social factors. Preliminary results in the field of problems in the process of creating and implementing XBRL by small and medium sized enterprises in the future are dependence of automation on taxonomy preparation level. The second side of problems to overcome is linked to costs of adopting XBRL, which are highly changeable and not easily predictable. The other problem is linked to taxonomies already in use, which are subject to changes and transformations what can cause problems for software systems designed for older taxonomies. In some European Union countries XML reporting format is required by state legislation for small and medium sized enterprises with no other option. XBRL also requires more skills from accounting experts than simpler XML based reporting.

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Corporate Tax Revenues of Selected European Countries Using Dynamic Conditional Correlation Approach

Author(s): Slavomíra Martinková,Jakub Danko / Language(s): English / Publication Year: 0

Keywords: corporate tax revenues; dynamic conditional correlations;

The present paper focuses on the comparison of the development of corporate tax revenue of the largest European countries for the period of 1965 - 2014, followed by identification of selected differences between the countries and characterization of causes of this different development. Different amount of the corporate tax revenue is often affected by different types of fiscal policy and existing deficit tendencies of fiscal economy of countries. The main aim of this paper is to analyze and compare the differences in the development of tax revenues between the countries themselves in space and time by using the method of dynamic conditional correlations, while interpretation of the results is based on traditional macroeconomic indicators. The method allows us to compare the development of corporate tax revenue and structure of tax components between each pair of analyzed countries separately, what is in comparison with the commonly used (e. g. panel) models considered to be its main positive aspect. A new look on the measurement and evaluation of the selected revenues allows us to explain the structure of revenue components (especially the tax ones) for the implementation and testing of fiscal consolidation.

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The Characteristics of the Investment through the Airbag Certificates

Author(s): Peter Mokrička / Language(s): English / Publication Year: 0

Keywords: return; risk; airbag certificate; investment;

The aim of this paper is to examine the change in the fundamental investment characteristics, especially a change in the expected return and the risk of investment, provided that the investor will use the selected certificate with a partial guarantee on invested capital instead of a direct investment in the underlying asset. First will be selected an underlying asset. It will be then modeled the development of its value by Monte Carlo simulation. This development also affects the development of the value of alternative investments through a certificate. The certificate will be divided into components from which it is comprised, and these will be priced. Then it will be statistically evaluated and assessed the change in investment characteristics compared with investment characteristics of direct investment in the underlying asset. Finally, discussions will be carried out and formulated recommendations for the retail investor.

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