Final Word from Wednesday, April 15, 2020

One of the Czech National Bank's three main legal responsibilities is to manage financial stability, but the Czech financial system is so fragile that in a crisis of the kind we are about to experience, the collapse of even a relatively small non-bank institution (insurance company, pension fund, investment company) can set off a dangerous domino effect. If we wrote this, we might legitimately be accused of inciting a panic. But these words are a paraphrase of what CNB Gov. Jiří Rusnok told Parliament last week in an effort to get new powers to prevent such a dangerous domino effect. His CNB colleagues Vojtěch Benda and Jakub Matějů added fuel to the fire yesterday by writing in HN that GDP will apparently fall this year more by more than in 2009 and that we will be glad if the decline is not in the double digits. Yet the finance ministry's official forecast is only -5.6%. Can someone who uses such scare tactics to acquire power be trusted not to abuse it once he gets it? [ Czech Republic quantitative easing intervention ]