Aleš Michl Explained

Aleš Michl
Office:Governor of the Czech National Bank
Vicegovernor:Eva Zamrazilová
Jan Frait
Term Start:1 July 2022
Predecessor:Jiří Rusnok
Office1:Member of the Bank Board of the Czech National Bank
Term Start1:1 December 2018
Birth Date:18 October 1977
Birth Place:Prague, Czechoslovakia
Nationality:Czech
Alma Mater:University 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

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. 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

Michl worked as an economic and investment strategist at Raiffeisenbank from 2006 to 2015. He co-founded an algorithmic asset-management fund specialising in US stocks and the Czech money market. 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. 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

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.

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.[16]

For the first time in its history, the bank commissioned an external review of its monetary policy, the results were published in November 2024.[17]

Publications

Key speeches

Books

Academic research

Notes and References

  1. Web site: Aleš Michl – CNB Governor . 5 June 2024 . Czech National Bank.
  2. Web site: Pět Rašínových myšlenek, které pomohou i dnes . Economia . ekonom.cz. 5 June 2024 . cs. 5 January 2023.
  3. News: Michl . Aleš . 2022-03-28 . Jestřábi a holubice: Matematizace Shakespeara . Mladá fronta Dnes . 8 . cs.
  4. News: Pokorná . Zdislava . 2024-08-26 . Michl se zbavil podílu v investičním fondu Quant, koupil ho Stuchlík .
  5. Web site: 2019-10-22 . Notification of government deficit and debt - 2018 . 2024-08-26 . Czech Statistical Office.
  6. News: 2022-05-11 . Od července bude novým guvernérem ČNB Aleš Michl, chce stabilitu sazeb . 2024-08-26 . České noviny . cs.
  7. Web site: Consumer price index according to ECOICOP - year-on-year index . Czech Statistical Unit . 5 June 2024.
  8. Web site: Inflation in September rose to 18 percent y-on-y . Czech Radio . Radio Prague International . 5 June 2024.
  9. Roční zpráva o výsledku hospodaření České národní banky - 2022. Czech National Bank. cs.
  10. Web site: Michl . Aleš . 2022-05-11 . Projev Aleše Michla při jmenování guvernérem . 2024-08-26 . Česká národní banka . cs.
  11. Jakub Svoboda . Aleš Michl: We have chosen stability . 5 June 2024 . Czech National Bank . Právo . 7 August 2022.
  12. Web site: Michl . Aleš . 2023-09-17 . The road to the target III . 2024-08-26 . Czech National Bank.
  13. The target . Czech National Bank . 5 June 2024 . Aleš . Michl . University of Pardubice, Pardubice . 23 April 2024 . CNB Discussion Forum 2024.
  14. Web site: Laca . Peter . 11 March 2024 . Czech Inflation Hits Goal in Support for Further Rapid Cuts . 5 June 2024 . Bloomberg.
  15. News: Laca . Peter . 2024-06-19 . Czech Central Bank Chief Says No Victory Yet in Inflation Fight . 2024-08-26 . Bloomberg.
  16. Mzdy v ČNB porostou příští rok o 4,4 % . 30 November 2023 . cs. 5 June 2024 . Czech National Bank.
  17. Web site: CNB publishes the results of the external review of its monetary policy analytical and modelling framework - Czech National Bank . 2024-11-11 . www.cnb.cz.
  18. Web site: Michl . Aleš . 2023-05-16 . The road to the target . 2024-08-26 . Czech National Bank . Prague University of Economics and Business.
  19. Web site: Michl . Aleš . 2023-06-15 . The road to the target II . 2024-08-26 . Czech National Bank . Czech Banking Association, Prague.
  20. Web site: Michl . Aleš . 2023-07-27 . Aleš Michl: The current level of inflation still makes it impossible to lower interest rates . 2024-08-26 . Czech National Bank . Senate of the Czech Republic, Prague.
  21. Web site: Michl . Aleš . 2024-06-13 . Taming Inflation from 18 to 2% and Paving the Way for ESG Financing . 2024-08-26 . Czech National Bank . London.
  22. Book: Michl, Aleš . MICHLiq: Inteligentní průvodce ekonomikou . R Media . 2014 . 978-80-905629-2-9 . Prague . cs . A Guide to Economics and Investment.
  23. Book: Michl, Aleš . Jestřábi a holubice . Pragma . 2019 . 978-80-7617-917-2 . Prague . cs . Hawks and Doves.
  24. Book: Michl, Aleš . Reset ekonomiky - Co nás čeká po covid-19? . Universum . 2021 . 978-80-242-7689-2 . Prague . cs . How to Reset the Economy.
  25. Book: Michl, Aleš . Matematické hádanky guvernéra ČNB . Universum . 2024 . 978-80-242-9579-4 . Prague . cs . The CNB Governor's Mathematical Puzzles.
  26. The Rushin Index: A Weekly Indicator of Czech Economic Activity . Tomáš . Adam. Ondřej . Michálek . Aleš . Michl . Eva . Slezáková . 14 September 2021 . Czech National Bank.
  27. Balancing Volatility and Returns in the Czech National Bank's Foreign Exchange Portfolio . Tomáš . Adam . Aleš . Michl . Michal . Škoda . 15 September 2023 . Czech National Bank.
  28. Michl . Aleš . 2019-09-03 . Peníze a inflace: ztracená kointegrace . Politická ekonomie. 67 . 4 . 385–405 . 10.18267/j.polek.1255. free .
  29. 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
  30. MICHL, Aleš. New Euro Convergence Criteria. Online. Politická ekonomie. 2016, roč. 64, č. 6, s. 713-729. ISSN 0032-3233. Dostupné z: https://doi.org/10.18267/j.polek.1105. [cit. 2024-08-23]

    References

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