K4 - Legal Procedure, the Legal System, and Illegal BehaviorReturn

This article is devoted to the banking sector regulation in the European Union and worldwide. The banking regulation is used to control banking risk activities and sustainable portfolio growth. Basel Committee on Banking Supervision (BCBS) coordinates this regulation process and supervision in the world. BCBS prepared the latest regulation called Basel 3. The European Union implemented Basel 3 with legislative package called CRD IV. We describe Basel 3 and CRD IV provisions with focus on capital adequacy, liquidity and leverage. CRD IV improves the capital quality and brings new capital buffers for systemic important institutions and systemic risk, conservative buffer and countercyclical buffer. CRD IV strengthens liquidity and leverage regulation. There are introduced three controlled ratios: liquidity coverage ratio (LCR) for short-termed liquidity, net stable funding ratio (NSFR) for long-termed liquidity and leverage ratio (LR) for leverage analysis. They are calibrated. There are described differences among these documents. Finally, we sum up assessment studies about Basel 3 and CRD IV impact on the European banking sector and economy.

The article emphasizes the meaning of good faith and traditional institutes of civil law - prescription and preclusion. This publication proposes to contribute to the illumination of exception of prescription against principles of good faith. A number of Court decisions are dedicated to this aspect; however, complex analysis is required. All legal relationships exist within a certain time frame. One of the key tasks of the general civil law is to define formal and substantive concepts of the Rule of Law. Time also plays an important role in defining the time period within which the participants in a trial have the right or are obliged to take certain procedural steps. Any law specifies the period of time within which legal action must be brought. Expiration of the time period causes loss of a legal right or entitlement. An exception of prescription in general is consistent with principles of good faith. However, under certain assumptions, exception of prescription establishes enforcement against the principles of good faith.

The article emphasizes the underlying problem of good faith in business law. This is a crucial topic widely discussed in the EU, but implementation of common tools is limited. Business practices in the Czech Republic were under the pressure of socialism for more than 40 years; therefore, Czech business culture has not been cultivated enough since the First Republic. The current tendencies in the decisions of Czech courts show a shift in the right direction. An analysis of legal regulations of good faith in different EU countries gives an overview of common similarities and differences.