Aleš Michl receives the award for the world’s best governor – the first in the history of the Czech Republic

The prestigious international award for the world’s best governor goes to the Czech Republic for the first time in its history. It was awarded to Aleš Michl, Governor of the Czech National Bank. The international jury highlighted his extraordinary determination to reduce inflation and protect the value of money in the Czech Republic, thanks to which the CNB was one of the first central banks to return inflation to the 2% target. The jury also praised his forward-thinking and innovative approach to the issues that are currently shaping the financial world. The Governor of the Year award is presented as part of the international Central Banking Awards 2025, organised under the auspices of the renowned Central Banking magazine.

The international jury recognised the successful strategy of CNB Governor Aleš Michl and the Bank Board under his leadership in setting monetary policy during a period of high inflation, a strategy that had previously been criticised by some media outlets and experts. In 2022, the Bank Board decided not to follow the recommendation of the CNB’s analytical model, which suggested raising the key interest rate to as high as 11% before cutting it sharply. Instead, the Bank Board repeatedly stated that its strategy was to keep interest rates at a sufficiently restrictive 7% for longer, while also emphasising a strong koruna, which reached record highs against the euro. All this was accompanied by consistent and open communication with the markets and the public.

Thanks to this approach, inflation dropped from 17.5% in July 2022 to exactly 2% – the CNB’s inflation target, which was hit in February, March and June 2024. This was achieved even sooner than the two-year time frame Aleš Michl had promised upon his appointment as Governor. Headline inflation for 2024 stood at 2.4%, the lowest level since 2018, remaining within the CNB’s tolerance band throughout the year.

“At a time of historic inflation, the Czech National Bank came together as one, committed to the very values we asked of society: slowing excessive money growth through discipline and savings. It was my honour and responsibility to lead this effort alongside the entire Bank Board. True leadership means making decisions today that honour the trust, hard work and savings of the people tomorrow,” says Governor Aleš Michl.

The international jury also highlighted efforts to bolster returns on the CNB’s international reserves and reduce the volatility of its profit/loss by changing the composition of the international reserve portfolio and purchasing gold. The CNB is now halfway towards the gold holdings target set by Aleš Michl. In 1993, it held 60.7 tonnes of gold. By 2019, it had 8 tonnes, the lowest in its history. The gold had been sold off. By the end of 2024, the CNB had 51.2 tonnes in its vaults. The goal is to have 100 tonnes of gold in the international reserves by 2028 – and to keep this treasure for future generations.

The judges also praised the successful cost savings made by the central bank with Aleš Michl at the helm – the CNB underwent the first comprehensive streamlining of its operations in ten years. The number of positions was cut by 5% compared to 2022. The number of managers reporting directly to the Bank Board was reduced from 17 to 14. During 2023 and 2024, the Board completely reviewed all work areas and processes to reduce bureaucracy in the CNB’s dealings with the market and internally.

The new Bank Board inherited a cumulative loss of CZK 487 billion from its predecessor at the end of 2022. The Bank’s assets at the time had a low expected return, while its liabilities were paying high interest. In recent years, the Bank Board has therefore focused on bolstering the expected return on assets while diversifying the international reserve portfolio. Profits made in 2023 and 2024 have reduced the cumulative loss substantially.

The jury assessed Governor Ales Michl’s support for the instant payment system as an innovative approach. Thanks to the active role of the CNB, 90% of banks on the Czech market have joined this system. Their clients can send and receive payments in real time, in a matter of seconds. This step has greatly increased the competitiveness and efficiency of the Czech financial market and confirmed the CNB as an innovative leader in the modernisation of the country’s financial infrastructure.

Last but not least, the jury hailed the CNB’s actions in resolving the insolvency of Sberbank CZ. Clients of the failed Sberbank got their money back thanks to the CNB’s active role and oversight of the process as a member of the creditors’ committee. The insolvency proceedings can thus be described with no exaggeration as the most successfully managed in history. Clients have so far recovered 95% of their guaranteed deposits, with the remainder to be paid once legal issues are resolved.

The prestigious Central Banking Awards 2025 recognise excellence and innovation in central banking. Winners are decided by a jury composed of selected members of the Central Banking editorial team and an advisory board. The awards are now in their twelfth year. The Central Banking Awards 2025 winners in all categories will receive their awards at a ceremony to be held in London on 11 June 2025.

Jakub Holas
Director, CNB Communications Division

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