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.

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