At a glittering awards ceremony at Grosvenor House, hosted by The Princess Royal, Ben Bernanke accepted the top award for…
The Federal Reserve still pips its peers when it comes to clear communication with the financial markets, according to this year’s survey of 1,000 market participants by Julian Callow’s economics team at Barclays Capital.
Amidst all the events of the past year there is, perhaps, surprisingly little change in the perception of how well central banks in America and Europe have expressed their monetary policy.
Note that 2007′s survey only extended to the Fed, the ECB, and the Banks of England and Japan. We’ll have wait a couple of years more before we have some wider comparisons.
But one trend is clear: the Bank of Japan has pulled its socks up quite considerably.
Callow at BarCap notes the obvious factors the markets are looking for in CB PR – transparency, timeliness of communication, and the like. But he also notes the importance of a clear central bank mandate and independence – something that has clearly held the Bank of Japan back:
One feature of our surveys is the relatively weaker rating that emerges for the BoJ’s communication, despite the many reforms undertaken in recent years to extend its communication methods (such as conducting press conferences on the day of policy board meetings, publishing a regular monthly report, economic projections and minutes). Based in part upon the comments made by respondents to our survey, it appears that this is partly due to the perception that the BoJ does not operate fully independently from the Japanese government. In turn, in our view, this perception complicates investors’ understanding of its objectives and reaction function, and hence their perception of its communication. Related to this, we note that it was not until March 2006 that the BoJ’s policy board indicated a numerical range for its understanding of medium to longer-term price stability in terms of the CPI (“an approximate range of between zero and two percent”).
The BoJ’s subsequent improvement in the survey seems to be down to decision last July to start publishing a statement after each policy meeting.
Aspiring central bank PR elsewhere should take note.
Related links:
PR for central bankers — Long Room