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The Transparency and Credibility of the European Central Bank

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  • Jakob De Haan
  • Fabian Amtenbrink
  • Sandra Waller

Abstract

The European Central Bank (ECB) ranks highly on our proposed central bank disclosure indicator, measuring activities of central banks to enhance the public's understanding of their policies. Nevertheless, our survey evidence suggests that private‐sector economists do not consider the ECB transparent. We argue that this may be caused by the quality of the information provided by the ECB. In addition, the way intermediaries report on the ECB may influence the public's perceptions. The ECB also does not rank highly in terms of credibility; still, most ECB policy decisions were in line with financial markets' expectations.

Suggested Citation

  • Jakob De Haan & Fabian Amtenbrink & Sandra Waller, 2004. "The Transparency and Credibility of the European Central Bank," Journal of Common Market Studies, Wiley Blackwell, vol. 42(4), pages 775-794, November.
  • Handle: RePEc:bla:jcmkts:v:42:y:2004:i:4:p:775-794
    DOI: 10.1111/j.0021-9886.2004.00529.x
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    References listed on IDEAS

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    1. Geraats, Petra M., 2000. "Why Adopt Transparency? The Publication of Central Bank Forecasts," Center for International and Development Economics Research, Working Paper Series qt0hw7h7cp, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    2. Gaspar, Vitor & Perez-Quiros, Gabriel & Sicilia, Jorge, 2001. "The ECB Monetary Policy Strategy and the Money Market," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 325-342, October.
    3. Eijffinger, Sylvester C.W. & Geraats, Petra M., 2006. "How transparent are central banks?," European Journal of Political Economy, Elsevier, vol. 22(1), pages 1-21, March.
    4. Winkler, Bernhard, 2000. "Which kind of transparency? On the need for clarity in monetary policy-making," Working Paper Series 26, European Central Bank.
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    Cited by:

    1. van der Cruijsen, Carin A.B. & Eijffinger, Sylvester C.W., 2010. "From actual to perceived transparency: The case of the European Central Bank," Journal of Economic Psychology, Elsevier, vol. 31(3), pages 388-399, June.
    2. Emmanuel Carré & Jézabel Couppey-Soubeyran & Dominique Plihon & Marc Pourroy, 2013. "Central Banking after the Crisis: Brave New World or Back to the Future?," Documents de travail du Centre d'Economie de la Sorbonne 13073, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. N. Nergiz Dincer & Barry Eichengreen, 2014. "Central Bank Transparency and Independence: Updates and New Measures," International Journal of Central Banking, International Journal of Central Banking, vol. 10(1), pages 189-259, March.
    4. Papadamou, Stephanos & Sidiropoulos, Moïse & Spyromitros, Eleftherios, 2017. "Interest rate dynamic effect on stock returns and central bank transparency: Evidence from emerging markets," Research in International Business and Finance, Elsevier, vol. 39(PB), pages 951-962.
    5. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
    6. Nergiz Dincer & Barry Eichengreen, 2009. "Central Bank Transparency: Causes, Consequences and Updates," NBER Working Papers 14791, National Bureau of Economic Research, Inc.
    7. Demertzis, Maria & Hughes Hallett, Andrew, 2007. "Central Bank transparency in theory and practice," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 760-789, December.
    8. Karl Kaltenthaler & Christopher J. Anderson & William J. Miller, 2010. "Accountability and Independent Central Banks: Europeans and Distrust of the European Central Bank," Journal of Common Market Studies, Wiley Blackwell, vol. 48(5), pages 1261-1281, November.
    9. Joan Huang & John Simon, 2021. "Central Bank Communication: One Size Does Not Fit All," RBA Research Discussion Papers rdp2021-05, Reserve Bank of Australia.
    10. Hamza Bennani, 2016. "Media Coverage and ECB Policy-Making: Evidence from a New Index," EconomiX Working Papers 2016-38, University of Paris Nanterre, EconomiX.
    11. Helge Berger & Michael Ehrmann & Marcel Fratzscher, 2011. "Monetary Policy in the Media," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(4), pages 689-709, June.
    12. van der Cruijsen, Carin & Demertzis, Maria, 2007. "The impact of central bank transparency on inflation expectations," European Journal of Political Economy, Elsevier, vol. 23(1), pages 51-66, March.
    13. Böhm, Jiří & Král, Petr & Saxa, Branislav, 2012. "The Czech National Bank's monetary policy in the media," European Journal of Political Economy, Elsevier, vol. 28(3), pages 341-357.
    14. Eleftherios Spyromitros, 2014. "The link between transparency and independence of central banks," Journal of Risk & Control, Risk Market Journals, vol. 1(1), pages 51-60.
    15. Tuysuz, Sukriye, 2007. "The effects of a greater central bank credibility on interest rates level and volatility response to news in the U.K," MPRA Paper 5263, University Library of Munich, Germany.
    16. Emmanuel Carré & Jézabel Couppey-Soubeyran & Dominique Plihon & Marc Pourroy, 2013. "Central Banking after the Crisis: Brave New World or Back to the Future? Replies to a questionnaire sent to central bankers and economists," Post-Print halshs-00881344, HAL.
    17. Michael Ehrmann & Marcel Fratzscher, 2009. "Explaining Monetary Policy in Press Conferences," International Journal of Central Banking, International Journal of Central Banking, vol. 5(2), pages 42-84, June.
    18. Matysek-Jędrych Anna, 2018. "On the growing accountability of central banks for financial stability–the macroprudential perspective," Economics and Business Review, Sciendo, vol. 4(4), pages 30-45, November.
    19. Stephanos Papadamou & Vangelis Arvanitis, 2015. "The effect of the market-based monetary policy transparency index on inflation and output variability," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 105-124, January.
    20. Eichler, Stefan & Littke, Helge C.N. & Tonzer, Lena, 2017. "Central bank transparency and cross-border banking," Journal of International Money and Finance, Elsevier, vol. 74(C), pages 1-30.
    21. van der Cruijsen, C.A.B. & Eijffinger, S.C.W., 2007. "The Economic Impact of Central Bank Transparency : A Survey," Discussion Paper 2007-06, Tilburg University, Center for Economic Research.
    22. Hayo, Bernd & Neuenkirch, Matthias, 2015. "Self-monitoring or reliance on media reporting: How do financial market participants process central bank news?," Journal of Banking & Finance, Elsevier, vol. 59(C), pages 27-37.
    23. van der Cruijsen, C.A.B., 2008. "The economic impact of central bank transparency," Other publications TiSEM 86c1ba91-1952-45b4-adac-8, Tilburg University, School of Economics and Management.
    24. N. Nergiz Dincer & Barry Eichengreen, 2007. "Central Bank Transparency: Where, Why, and with What Effects?," NBER Working Papers 13003, National Bureau of Economic Research, Inc.

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