F31 - Foreign ExchangeReturn

Using local projection (LP) method, we assess Credit Default Swap (CDS) changes in the Central-East European countries. Cost-risk optimization in public debt management refers on the fine-tuning the ratio of capital import and foreign currency denominated borrowing to domestic funds. Literature defines closeness centrality as an indicator which highlights the relative importance of an asset within a network, estimated by a quarterly minimum spanning tree graph. We show that CDS changes are driven not only by the foreign exchange shocks but also by foreign currency debt and funding as well as the closeness indicator which signs a network-bias. We also find evidence that relative isolation better describes the Czech sovereign debt market. Thus, this paper makes a new contribution to the debate of public debt funding strategies, while highlighting the importance of network-biases.

The paper tested contagion effects among free floating African currencies and Euro with a control variable like the Euro-pegged CFA Franc. Contagion should be based on deep trade, funding and political relationships which was valid for connections between African countries and such developed countries like the United States or the Eurozone. The theory suggests increased common movements under shock periods which were tested on a daily time series between 2000 and 2015, studying relationships under recession periods in the United States or the Eurozone or under days with extreme fluctuation. The results presented contagions only for the emerging South African currency while the others proved to be relatively independent.

This article deals with the payment service provider of small-scale. These entities are authorized to provide payment services in the Czech Republic thanks to Payment System Act. This paper provides a practical analysis of the behavior of these entities with a preview of a defined theoretical base, which represents also the current legislation. Potential customers of these payment services are mainly small and medium enterprises, entrepreneurs and private individuals too. From a wide range of payment services this article mainly focuses on the implementation of cashless payments to and from abroad, which are associated with the conversion of a Czech or foreign currency. The empirical part is focused on monitoring of obtainable exchange rate by selected payment service provider of small-scale. Data were compared with publicly available data of selected payment institution in order to verify the hypothesis if these entities are not only unnecessary part of the whole chain. According to the findings of practical knowledge of these entities we can say that payment institutions act to payment service providers of small-scale in two unique positions, as service provider as well as a competitive entity.