In recent weeks, you may have seen news about the collapse of US banks.

These include Silicon Valley Bank, Signature Bank and Silvergate, and Credit Suisse of Switzerland. The question is whether we should fear a similar scenario for banks in the Czech Republic.

First of all, it is important to describe why the collapse of the US banks occurred. While most Czech banks provide a wide range of services and products, there are many so-called 'specialised' banks in the USA, including the banking houses mentioned above. Silicon Valley Bank (SVB) was mainly dedicated to lending to start-ups, Signature Bank and Silvergate were focused on fintech, mainly in the area of cryptocurrencies.
With this much specialization, banks are more susceptible to external influences and unexpected events. In addition, both SVB and Silvergate had the problem of unsecured short-term liabilities that were not covered by sufficient short-term assets.
Credit Suisse has faced problems for a longer period of time, mainly in the area of suspected money laundering. The stock crash was then caused by the revelation of errors in financial statements.

Czech banks operate under the supervision of the Czech National Bank and undergo regular stress tests. The CNB subsequently issues press releases on the stability of the banking sector every six months and current data shows high resilience to adverse shocks (FINANCIAL STABILITY REPORT - FALL 2022 (cnb.cz) )

Moreover, banks in the Czech Republic have sufficiently large capital buffers and focus primarily on the domestic market, which contributes to their stability. Although many banks are part of multinational corporations, they operate largely independently (thanks to changes following the 2008 financial crisis) and are more resilient even in the event of parent company problems.

We don't have to worry about a bank collapse in the Czech Republic yet :-)