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Aleš Michl

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Aleš Michl
Aleš Michl in 2019
Governor of the Czech National Bank
Incumbent
Assumed office
1 July 2022
Vice GovernorEva Zamrazilová
Jan Frait
Preceded byJiří Rusnok
Member of the Bank Board of the Czech National Bank
Incumbent
Assumed office
1 December 2018
Personal details
Born (1977-10-18) 18 October 1977 (age 46)
Prague, Czechoslovakia
NationalityCzech
Alma materUniversity of Economics in Prague

Aleš Michl (born 18 October 1977) is a Czech economist and the fifth Governor of the Czech National Bank. He has been a member of the Czech National Bank's Board since 1 December 2018, and was appointed Governor by the President of the Czech Republic, effective from 1 July 2022, for a six-year term.

Michl is a former commercial bank investment strategist and co-founder of an algorithmic asset-management fund. He is the author of academic and popular articles and books on economics and the popularisation of mathematics. He holds a PhD in finance.

Education

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Michl earned his Ph.D. in finance from the Prague University of Economics and Business (VŠE) in 2020, having graduated with a master's degree from the same institution in 2002.[1] In 2005, he completed a training programme on game theory and the psychology of decision-making at the Summer School of the London School of Economics and Political Science, and in 2009, he took an investment portfolio management course at the Wharton School in Philadelphia.[1]

Michl is an admirer of Alois Rašín,[2] a key figure in the establishment of Czechoslovakia's economic policy and independent currency, and the first Czechoslovak Minister of Finance. He considers himself a monetarist and is an admirer of Milton Friedman's work.[3]

Career

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Michl worked as an economic and investment strategist at Raiffeisenbank from 2006 to 2015.[1] He co-founded an algorithmic asset-management fund specialising in US stocks and the Czech money market.[1] He later sold his share in the fund and ceased all investment activities due to his position at the Czech National Bank.[4] Additionally, from 2014 to 2018, he served as an external economic advisor to the Czech Ministry of Finance, focusing on macroeconomic analysis and government debt stabilisation.[1] During this time, the Czech Republic recorded budget surpluses in public finances for three consecutive years.[5] He has been a member of the Czech National Bank's Board since 1 December 2018.[6]

Governor

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Michl was appointed Governor of the Czech National Bank (CNB) by the President of the Czech Republic, effective from 1 July 2022, for a six-year term.[6] Since assuming the role of governor, he has navigated the institution through a period of significant economic challenges. When Michl took office, inflation in the Czech Republic stood at a staggering 17.5%, peaking at 18% a few months later[7] - the highest rate since the transition to a market economy in the 1990s.[8] Additionally, the bank was dealing with the largest loss in its history,[9] prompting the need for rationalisation and cost-cutting measures.

In his speech upon being appointed Governor in mid-2022,[10][11] Michl pledged to bring inflation under control within two years. He emphasised the need to maintain higher interest rates than those seen in the past decade, advocating for an economy driven by savings rather than debt. Under his leadership, the bank's strategy in combating inflation expanded to include a strong koruna policy, which reduced the cost of importing expensive raw materials at the time, and, in turn, helped lower inflation.[12] By spring 2023, the CNB had achieved the strictest monetary conditions in two decades, with the koruna reaching its strongest level in history.[13] In February and March 2024, the CNB successfully reduced year-on-year inflation to the target of 2%, a level not seen since December 2018.[14] This marked the restoration of price stability, fulfilling the bank's legal mandate. Michl has emerged as one of the first central bankers in Europe to deliver on this goal.[15]

Under Michl's leadership, the CNB began purchasing gold and increasing the share of equities in its foreign exchange reserves. The goal of these actions is to enhance the expected return on the bank's assets so that, in the future, these returns will exceed the expected costs of liabilities, thereby enabling the bank to recover from its financial losses.[16][13]

Additionally, under his leadership, the CNB reduced its workforce in 2023 for the first time in ten years, as Michl inherited an institution facing record operational expenditure growth. In response, a comprehensive rationalisation effort was undertaken in 2023, which included reducing the top management team from seventeen to fourteen directors and decreasing the total number of positions by 5.1% - the first such large-scale reduction in a decade.[17]

For the first time in its history, the bank commissioned an external review of its monetary policy, the results of which will be presented in 2025.[18]

Publications

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Key speeches

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  • The Road to the Target I (Speech at the University of Economics and Business in Prague, Discussion on Inflation: The Road to the Target)[19]
  • The Road to the Target II (Speech at the Assembly of Members of the Czech Banking Association)[20]
  • Aleš Michl: The Current Level of Inflation Still Makes it Impossible to Lower Interest Rates (Speech delivered during the Discussion of the Financial Market Supervision Report for 2022 in the Senate of the Czech Republic)[21]
  • The Road to the Target III (Speech at the Tomas Bata University in Zlín, Discussion on Inflation: The Road to the Target)[12]
  • The Target (The Governor's speech at the CNB Discussion Forum in Pardubice)[13]
  • Taming Inflation from 18 to 2% and Paving the Way for ESG Financing (Governor Aleš Michl's Address to the Central Banking Summer Meetings Conference in London)[18]

Books

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  • MICHLiq - průvodce ekonomií a investicemi (A Guide to Economics and Investment), 2014[22]
  • Jestřábi a holubice (Hawks and Doves), 2019[23]
  • Reset ekonomiky (How to Reset the Economy), 2021[24]
  • Matematické hádanky guvernéra ČNB (The CNB Governor's Mathematical Puzzles), 2024[25]

Academic research

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  • The Rushin Index: A Weekly Indicator of Czech Economic Activity, Tomáš Adam, Ondřej Michálek, Aleš Michl, Eva Slezáková[26]
  • Balancing Volatility and Returns in the Czech National Bank's Foreign Exchange Portfolio, Tomáš Adam, Aleš Michl, Michal Škoda[16]
  • Money and Inflation: Lost Cointegration, Aleš Michl[27]
  • Ten Years Later: Lessons for DSGE Builders and Czech Policy Makers, Aleš Michl[28]
  • New Euro Convergence Criteria, Aleš Michl[29]

References

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  1. ^ a b c d e "Aleš Michl – CNB Governor". Czech National Bank. Retrieved 5 June 2024.
  2. ^ "Pět Rašínových myšlenek, které pomohou i dnes". ekonom.cz (in Czech). Economia. Retrieved 5 June 2024.
  3. ^ Michl, Aleš (28 March 2022). "Jestřábi a holubice: Matematizace Shakespeara". Mladá fronta Dnes (in Czech). p. 8.
  4. ^ Pokorná, Zdislava (26 August 2024). "Michl se zbavil podílu v investičním fondu Quant, koupil ho Stuchlík".
  5. ^ "Notification of government deficit and debt - 2018". Czech Statistical Office. 22 October 2019. Retrieved 26 August 2024.
  6. ^ a b "Od července bude novým guvernérem ČNB Aleš Michl, chce stabilitu sazeb". České noviny (in Czech). 11 May 2022. Retrieved 26 August 2024.
  7. ^ "Consumer price index according to ECOICOP - year-on-year index". Czech Statistical Unit. Retrieved 5 June 2024.
  8. ^ "Inflation in September rose to 18 percent y-on-y". Radio Prague International. Czech Radio. Retrieved 5 June 2024.
  9. ^ Roční zpráva o výsledku hospodaření České národní banky - 2022 (PDF) (Report) (in Czech). Czech National Bank.
  10. ^ Michl, Aleš (11 May 2022). "Projev Aleše Michla při jmenování guvernérem". Česká národní banka (in Czech). Retrieved 26 August 2024.
  11. ^ "Aleš Michl: We have chosen stability". Czech National Bank (Interview). Interviewed by Jakub Svoboda. Právo. 7 August 2022. Retrieved 5 June 2024.
  12. ^ a b Michl, Aleš (17 September 2023). "The road to the target III". Czech National Bank. Retrieved 26 August 2024.
  13. ^ a b c Michl, Aleš (23 April 2024). The target (Speech). CNB Discussion Forum 2024. Czech National Bank. University of Pardubice, Pardubice. Retrieved 5 June 2024.
  14. ^ Laca, Peter (11 March 2024). "Czech Inflation Hits Goal in Support for Further Rapid Cuts". Bloomberg. Retrieved 5 June 2024.
  15. ^ Laca, Peter (19 June 2024). "Czech Central Bank Chief Says No Victory Yet in Inflation Fight". Bloomberg. Retrieved 26 August 2024.
  16. ^ a b Adam, Tomáš; Michl, Aleš; Škoda, Michal (15 September 2023). "Balancing Volatility and Returns in the Czech National Bank's Foreign Exchange Portfolio" (PDF). Czech National Bank.
  17. ^ "Mzdy v ČNB porostou příští rok o 4,4 %" (Press release) (in Czech). Czech National Bank. 30 November 2023. Retrieved 5 June 2024.
  18. ^ a b Michl, Aleš (13 June 2024). "Taming Inflation from 18 to 2% and Paving the Way for ESG Financing". Czech National Bank. London. Retrieved 26 August 2024.
  19. ^ Michl, Aleš (16 May 2023). "The road to the target". Czech National Bank. Prague University of Economics and Business. Retrieved 26 August 2024.
  20. ^ Michl, Aleš (15 June 2023). "The road to the target II". Czech National Bank. Czech Banking Association, Prague. Retrieved 26 August 2024.
  21. ^ Michl, Aleš (27 July 2023). "Aleš Michl: The current level of inflation still makes it impossible to lower interest rates". Czech National Bank. Senate of the Czech Republic, Prague. Retrieved 26 August 2024.
  22. ^ Michl, Aleš (2014). MICHLiq: Inteligentní průvodce ekonomikou [A Guide to Economics and Investment] (in Czech). Prague: R Media. ISBN 978-80-905629-2-9.
  23. ^ Michl, Aleš (2019). Jestřábi a holubice [Hawks and Doves] (in Czech). Prague: Pragma. ISBN 978-80-7617-917-2.
  24. ^ Michl, Aleš (2021). Reset ekonomiky - Co nás čeká po covid-19? [How to Reset the Economy] (in Czech). Prague: Universum. ISBN 978-80-242-7689-2.
  25. ^ Michl, Aleš (2024). Matematické hádanky guvernéra ČNB [The CNB Governor's Mathematical Puzzles] (in Czech). Prague: Universum. ISBN 978-80-242-9579-4.
  26. ^ Adam, Tomáš; Michálek, Ondřej; Michl, Aleš; Slezáková, Eva (14 September 2021). "The Rushin Index: A Weekly Indicator of Czech Economic Activity" (PDF). Czech National Bank.
  27. ^ Michl, Aleš (3 September 2019). "Peníze a inflace: ztracená kointegrace". Politická ekonomie. 67 (4): 385–405. doi:10.18267/j.polek.1255.
  28. ^ MICHL, Aleš. Ten Years Later: Lessons for DSGE Builders and Czech Policy Makers. Review of Economic Perspectives's Cover Image Review of Economic Perspectives. 2019, roč. 19, č. 3, s. 159 - 174
  29. ^ MICHL, Aleš. New Euro Convergence Criteria. Online. Politická ekonomie. 2016, roč. 64, č. 6, s. 713-729. ISSN 00323233. Dostupné z: https://doi.org/10.18267/j.polek.1105. [cit. 2024-08-23]
Government offices
Preceded by Governor of the Czech National Bank
2022–present 		Incumbent
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