Financial, fiscal and housing policy aspects of Contract Savings for Housing (CSH) in Transition Countries – Czech Republic
The World Bank
Download Document| Date Published | 2003 |
| Version | Final Report |
| Primary Author | Hans-Joachim Dübel |
| Other Authors | |
| Theme | |
| Country | Czech Republic |
Abstract
This study looks into first ten years after the implementation of the contract savings for housing (CSH1) system in Slovakia and the Czech Republic, a closed savings and loan system which isolates borrowers from interest-rate volatility by fixing both savings and loan rates. The CSH system, elsewhere referred to as ‘building savings’ or ‘housing savings’ system, was implemented in Slovakia in 1992 and in the Czech Republic in 1993. In both countries they are copies of the Austrian and German ‘Bausparen’, a child of the hyperinflation of the 1920s which had led to a breakdown of capital market finance for housing and fostered the development mutual savings and loan systems along the lines of the anglo-saxon S&L tradition. Precisely at the time when notably the U.S.broke with the traditional model, in the early years of the New Deal, Germany decided to further regulate and publicly support Bausparen as a complementary funding channel to often bond-financed mortgages. Later, Bausparen was exported to Austria where it gained particularly high popularity.