Final Word from Monday, March 13, 2023

Efforts by Pres. Petr Pavel, ex-CNB Gov. Jiří Rusnok, political commentator Jan Kysela and others to run CNB Gov. Aleš Michl out of office didn't work. Michl received a top-secret security clearance on Fri. from the NBÚ vetting office, so Pavel and his advisers won't be able to include Michl's removal in the president's agenda for the first 100 days. In a way the timing of the NBÚ decision was good news for those who wanted Michl's scalp, because the failure late last week of Silicon Valley Bank (SVB) of California introduces a new level of uncertainty into global finance, and the Czech market will have enough to deal with even without questions about Michl's future at the central bank. After years of easy money, the sharply higher interest rates and "quantitative tightening" that led to SVB's failure will be the catalysts that eventually turn inflation into deflation. Once cheap money has been passed around, it's hard to gather it back up. With Michl's position as governor affirmed, Pavel and Rusnok can now start acting like statesmen and devote their attention to building confidence in the financial markets, instead of undermining it. [ Czech Republic undermine constitutional lawyer Czech National Bank easing ]

Glossary of difficult words

to vet - to investigate (someone) thoroughly, esp. in order to ensure that he or she is suitable for a job requiring secrecy, loyalty or trustworthiness;

quantitative tightening - a monetary policy tool applied by central banks to decrease the amount of liquidity or money supply in the economy.


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word