Prague’s Financial Journey: From Austro-Hungarian Empire to the PX Index

Published by Evan Louise Madriñan on 19/05/202519/05/2025

Explore the rise, fall, and rebirth of one of Central Europe’s oldest stock exchanges.

To Prague, Czech Republic!

Prague won’t let you go, the little mother has claws.

—Franz Kafka (Czech Novelist and Writer)

When you think of Prague, perhaps you think of Baroque cathedrals, cobblestone streets, and the majestic Charles Bridge. But nestled within this historic city lies a financial institution with a story as rich as its own: the Prague Stock Exchange (PSE).

It may not be as globally renowned as the Amsterdam Stock Exchange, but the Prague Stock Exchange tells a story just as powerful.

It reflects the resilience of the Czech people — how, despite political regimes, world wars, and systemic upheaval, they reclaimed their economic voice. The market paused, stumbled, and even disappeared for a time, but it came back.

And in the end, it prevailed — providing a platform not just for capital, but for hope, ownership, and financial renewal. A testament to how a country can rebuild itself, one trade at a time.

📝 My visit to Prague in May 2025 marks another chapter in my journey of ‘Exploring the World’s Financial Tapestry’—a series where I blend travel with my passion for finance and markets. This is the second blog in that series, where curiosity meets capital in the most unexpected corners of the world.

The Sweet Beginnings: Prague Stock Exchange

The seeds of Burza cenných papírů Praha —the Prague Stock Exchange— were sown in the 19th century. While efforts to establish a stock exchange in Prague date back to the reign of Queen Maria Theresa of Bohemia ¹ it wasn’t until the reign of King Franz Joseph I ², in 1871, that the exchange officially commenced operations.

Initially, it facilitated trading in both securities and commodities, with sugar being a particularly significant commodity. This made Prague a pivotal market for the Austro-Hungarian Empire’s sugar trade.

Trials, Triumphs, and Turmoil

The early 20th century brought both prosperity and challenges. The interwar period³ marked the exchange’s golden age, with the Prague exchange even surpassing the Vienna stock exchange⁴ in importance. However, the onset of World War II and subsequent political changes led to the exchange’s closure in 1948 during the Communist regime, halting its operations for over four decades.

A New Chapter: Rebirth in the Modern Era

After the fall of communism, Prague got its second chance. On April 6, 1993, the Prague Stock Exchange reopened — now a symbol of the Czech Republic’s shift toward capitalism.

It wasn’t just symbolic. The rebirth of the exchange played a huge role in privatizing over 1,000 state-owned companies, helping the country build its modern economy from the ground up.

Building a Financial Ecosystem

https://www.google.com/maps/d/edit?mid=1qhxqEApx8gYBTt0YM0V1-0mzFeLdTJ4&usp=sharing — My Maps

Today, the PSE is more than just a stock exchange; it’s the cornerstone of the Czech Republic’s financial infrastructure. It operates under the PX Group umbrella, which includes:

• Central Securities Depository Prague (CSD Prague): Responsible for the settlement of securities trades and maintaining the central register for dematerialized securities⁵ in the Czech Republic .
• Power Exchange Central Europe (PXE): Established in 2007, PXE serves as a specialized trading platform for electricity, established in 2007. It operates in three Central European countries, the Czech Republic, Slovakia, and Hungary

The PSE is a joint-stock company, with Wiener Börse AG (Also known as the Vienna Stock Exchange⁶ holding a 99.54% ownership stake. Trading is conducted through licensed traders who are members of the exchange, ensuring a regulated and transparent market environment.

Currently, the PSE has 54 publicly listed companies with a domestic market capitalization of $37.7 billion based on https://sseinitiative.org/exchanges-filter-search data. Let’s compare this to some of the stock exchanges worldwide.

Global Integration and Recognition

The PSE’s significance extends beyond national borders. It is a member of the Federation of European Securities Exchanges (FESE)⁷ and has been recognized by the U.S. Securities and Exchange Commission as a “Designated Offshore Securities Market,” indicating its adherence to international standards and its appeal to global investors.

The PX Index

Every major exchange has a benchmark index. For Prague, it’s the PX Index — a market cap-weighted index tracking the biggest stocks listed on the PSE.

As of May 17, 2025, here are the top 10 heavyweights in the PX Index:

Below is a concise 6-minute video produced by the Prague Stock Exchange, offering a visual summary of its remarkable journey. As described by the PSE, it’s “The history of the Exchange in a short film prepared on the occasion of the 20th anniversary of the modern history of PSE.”

In the European Union But Not the Eurozone: The Case for the Czech Koruna

There is this thinking that when a European country is part of the European Union, that country will automatically adopt the Euro (€) currency. That’s not the case.

The United Kingdom was a part of the European Union before it left in January 2020. Despite being a member of the union before leaving it, they did not adopt the Euro (€) currency, and instead retained the British Pound (£). This means they are not part of the Eurozone.

So what’s the difference between the European Union and the Eurozone?

• The European Union
  • It is a political and economic union of 27 member states located primarily in Europe.
  • It’s a broader organization that covers a wide range of policies beyond just monetary policy, including trade, agriculture, environmental issues, and more.
  • All members of the Eurozone are also members of the EU, but not all EU members are in the Eurozone.

• The Eurozone
  • It is a monetary union consisting of the 20 EU member states that have adopted the euro (€) as their common currency.
  • Its primary focus is on the single currency and the coordination of monetary policy within these member states, which is managed by the European Central Bank (ECB).

The following are EU member states that are not part of the Eurozone and still use their national currencies: Bulgaria, the Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden.

Why Doesn’t the Czech Republic Use the Euro?

Although the Czech Republic has been a member of the European Union since 2004, it still uses the Czech koruna (CZK) instead of the euro. This isn’t a mistake—it’s a deliberate choice. The country has met some of the EU’s criteria for euro adoption, but it has opted to retain control over its monetary policy through the Czech National Bank.

Many Czechs are skeptical about adopting the euro, citing concerns over losing economic flexibility and control, especially after witnessing financial instability, like the European debt crisis (2009-2012), in other eurozone countries.

Politically, there’s also no strong push or set timeline for making the switch. The koruna itself has deep historical roots, having been introduced in 1993 after the peaceful split of Czechoslovakia. Before that, the region used the Czechoslovak koruna, and earlier still, the Austro-Hungarian krone during imperial rule. So for now, the koruna remains both a practical economic tool and a powerful symbol of national identity.

📝 Note: The photo above shows the Czech National Bank — the central bank of the Czech Republic. It is responsible for the country’s monetary policy, the issuance of the Czech koruna (CZK), and supervising the financial system. Like many central banks around the world, it operates as an independent institution, meaning its decisions are made without government interference.

To Sum It Up

The Prague Stock Exchange’s story — from its 19th-century roots, through wars, communism, and rebirth — is a mirror of the Czech Republic’s own resilience. It reflects a country that’s endured, adapted, and carved out its space in the modern financial world.

More than that, it gave ordinary people a stake in their country’s growth. A way to own a piece of its future.

Additional Entry: Finance x History

It never ceases to amaze me how every country carries a deep, layered history, and within it, thousands of stories that tell us the cause-and-effect relationships and insights into human behaviour.

That’s why my fascination with finance is deeply tied to history. Because often the challenges we face now have insights and answers from the past.

Yes, the world changes, and the past circumstances are different from today — new technology, new systems, new ideologies. But the core of human behaviour and desires never does. And through this, it shows how money and resources flow. Then, just like now.

And if we pay close attention, history doesn’t just teach us — it whispers the clues to the answers we’ve been looking for.

This blog is for informational purposes only and not a Financial Recommendation. Not all information will be accurate. Consult an independent financial professional before making any major financial decisions.

1. Queen Maria Theresa (1717–1780) was once the most powerful woman in Europe. At just twenty-three, she inherited the sprawling Habsburg Empire — a diverse patchwork of languages, cultures, and rivals on all sides. During her reign, she was the sovereign of Austria, Hungary, Croatia, Bohemia, Transylvania, Slavonia, Mantua, Milan, Moravia, Galicia and Lodomeria, Dalmatia, the Austrian Netherlands, Carinthia, Carniola, Gorizia and Gradisca, Austrian Silesia, Tyrol, Styria, and Parma. ↩︎
2. Franz Joseph I (1830–1916) wasn’t just King of Hungary; he was also Emperor of Austria. After the 1867 merger that formed the Austro-Hungarian Empire, the Czech lands fell under his rule. ↩︎
3. The interwar period (1918–1939) refers to the years between World War I and World War II. It was a time of booming economies, political shifts, and social transformation across Europe. ↩︎
4. The Austro-Hungarian Empire had two capitals: Vienna (Austria) and Budapest (Hungary). This dual monarchy system lasted from 1867 until the empire’s collapse in 1918. This dual system started during the reign of Franz Joseph I’s rule. ↩︎
5. Dematerialized securities (or “demat” securities) are stocks, bonds, or mutual funds that exist in digital form—no paper certificates, just numbers on a screen. ↩︎
6. The Wiener Börse AG (Vienna Stock Exchange) is based in Austria’s capital. It owns the Prague Stock Exchange and helps operate several exchanges in Central and Eastern Europe, like those in Budapest, Zagreb, and Ljubljana. ↩︎
7. The Federation of European Securities Exchanges (FESE) represents Europe’s regulated markets. Think of it as the voice of European stock exchanges, working to keep the financial system running smoothly and competitively. ↩︎