Central banks used to hide their deliberations from public view more jealously than the papal conclave. Whereas the college of cardinals announced their decision to the crowds outside, traders once had to guess what decision the US Federal Reserve had made. In Britain interest rates were set on the whim of a chancellor with one ear to the Bank of England and the other directed towards Westminster. Monetary analysts needed as good a feel for party politics as the economic data.
Transparency is now much more the order of the day. From the early 1990s central banks started gaining more independence, better to resist the inflationary urges of politicians. With such responsibility has come the need for more accountability. Meetings take place to a regular schedule, with minutes published alongside voluminous reports explaining the bank’s economic analysis. Many central banks reveal how decision makers voted. The Fed goes further, producing “dot charts” showing where each committee member believes interest rates will go.
Even the European Central Bank is now contemplating greater disclosure. With its fondness for consensus over dispute, the ECB has hitherto kept its monetary deliberations secret. Now it is following the lead of others such as Sweden’s Riksbank and the Fed by publishing meeting minutes, albeit after a delay of a few weeks.