Czech Capital Markets and Pension Funds

Development of Czech capital markets in transition period is a very impressive story full of expectations and full of bitterness. The greater expectations were in the beginning of a reform process the deeper disillusion followed later. Just in the beginning we can say that initial expectations connected with the capital markets were maybe too high, much higher than the reality could ever fill. Let us start this chapter with a description of initial conditions for the Czech capital markets. Primarily there was never any deeper tradition of stronger role of capital markets in the former Czech Republic.1 We must say that Czech markets cannot be evaluated through the prism of US capital markets where the role of them is extreme. Czech tradition was much closer to the German model of financial markets, the model in which not capital markets but banks really do play a crucial role in the economy. 2 There is no country on European continent (only Britain is maybe some exception but sensu stricto it is not on the continent) comparable with USA. Where these ideas of strong capital markets role came from? Many of Czech reform ideas (including some reform mistakes) in this field were caused by the charming influence o