ABSTRACT
The maintenance of an effective banking system was of the utmost importance for the economic development of the fledgling Czechoslovak Republic. The financial structure, inherited from the Habsburg economy, had two major components: one consisting of the commercial banks and the other comprised of secondary institutions, such as savings banks and small loan companies. This was filled out by the activities of private banking houses, together with those of provincial and mortgage banks, but, none the less, these particular institutions played only minor roles in the functioning of the system. In 1918 the banks already performed the tasks of accumulating and mobilizing capital, whereas the major institutions also played a very important role in the allocation of capital. This integration of the financial market was due to the predominance of universal banks, which since the late nineteenth century had provided a broad range of services spanning the provision of credit and capital.
