ŠIK’S REFORM IN MONETARY ECONOMY IN CSSR

The study analyzes economic reform prepared in 1964-65 and carried out in stages through 1968 and focuses on the banking sector. The economic reform was regarded as comprehensive and particular opinions on it were developed gradually. The reform was unambiguously aimed at abandoning the Soviet type centrally planned economy and transitioning to a market economy with a dominant role of state and indicative planning. Banking and financial sector was not a significant part in Šik’s reform, since the real economy was more significant. However, the rehabilitation of functions of money forced the managing centre to create an adequate institutional environment. In the banking system the concept of separate central and commercial banking was enforced, nevertheless the framework of monetary policy instruments was not put in practice. This situation was comparable with the transformation to market economy at the beginning of the 1990s but there were stronger internal and external political limitations in the 1960s. Šik’s reform concerning banking could not have been carried out thoroughly because of the Soviet external intervention in August 1968 and subsequent change in home affairs. Despite, the banking sector was one of the industries where the pursued reform changes endured to a certain extent, and they became a basis for attempts at autonomous monetary policy and activation of money in the 1970s and 1980s