increases. without strong growth in the quantity of money, the price level has to stop rising. 3 / 6 bis - central bankers'speeches that ’ s why i said straight away on my appointment as central bank governor in may 2022 ( michl, 2022b ) that to tame inflation we need to tame the growth of the money supply in the economy. let ’ s use the czech republic as an example. the flow indicators are currently telling us the following : new mortgages stood at czk 67 billion in january – august, the lowest figure since 2015 and down 47 % year on year. koruna - denominated corporate loans amounted to czk 163 billion in the same period, down 41 % year on year. the stock indicators reveal where the problem lies : m3 growth was 9. 6 % year on year in august ( the latest available reading ). the main items of m3 include loans to government and loans to the private sector. our tight monetary policy has reined in loans to the private sector. they recorded yearon - year growth of just 4. 7 % in august ( as against 12. 3 % a year earlier ). loans to central government rose by 12. 8 % in the same period ( 13. 3 % a year earlier ). such large government debt financing requirements represent an upside risk to inflation. by the way, banks in the czech republic now have 18 % of their assets ( if we deduct deposits with central banks ) in government bonds. this is one of the highest figures in the eu. milton friedman ’ s view that restrictive monetary policy is not dependent on the support of fiscal policy and can be effective in its own right was formulated for a situation where there was an appropriate amount of bank liquidity. except we are now living in a highinflation system in which previous monetary policy mistakes have given rise to a sea of excess liquidity that makes it easy to finance government debt ( see michl, 2015, 2023a ). yet reducing the government budget deficit plays a key role alongside tight monetary policy in the fight against inflation ( for details, see also mandel and dvoak, 2022 ). that ’ s why i have been saying at the press conferences after all our monetary policy meetings that lowering the government debt ratio is another key condition for bringing down inflation ( see also, for example, cochrane, 2023 ). 1 to sum up, the data shows that we have significantly tamed money growth

to fruition it is of course key that the risk transfers are genuine ; in other words, it is necessary that the risk is really transferred to third parties. the experience of the crisis showed that this condition was not always met in the past. in this respect, i would like to highlight the important work done by eba in the assessment of the current supervisory practices and the proposals made to further enhance the criteria of significant risk transfer for securitisation in its discussion paper. conclusion let me conclude. the ecb places great importance on the health of the european securitisation market. the abs loan - level initiative has made an important contribution in ensuring a high degree of transparency to enable investors to assess the embedded risks of securitisations. obviously, abs had to become safer after the experience of the great financial crisis, in particular with securitized us - subprime mortgages. regulators and legislators have acted accordingly, and the work has not yet been completed. but we should not throw the baby out with the bath water. instead, the potential of healthy securitizations should be exploited. in line with the commission goal to revive the securitisation market in europe, in order to broaden investment opportunities for investors and boost lending to households and businesses a number of barriers need yet to be overcome. the sts regulation could make an important contribution. much work has already been conducted, nevertheless many important technical standards still need to be finalised and some other uncertainties still remain. in this context, we have to be mindful amid the interdependencies of different pieces of legislation. calibration of solvency ii is essential for insurance companies as investors in securitisation. further clarity of securitisation special purpose entities under the emir framework is needed. finalisation of basel iii may impact securitisation as a means of transferring risk. these are challenges that lie ahead of us. 3 / 3 bis central bankers'speeches