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Reputational Risk Management in Central Banks

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  • Jill Vardy

Abstract

This paper discusses reputational risk in the context of central banking and explains why it matters to central banks. It begins with a general discussion of reputational risk within the broader framework of risk management. It then outlines how central banks define, measure, monitor and manage reputational risk, citing examples from central banks around the world, including the Bank of Canada. Finally, it presents a model for integrating reputational risk into policy analysis and operational planning—an “embedded communications” approach that ensures such considerations are brought into the core of central bank decision making.

Suggested Citation

  • Jill Vardy, 2015. "Reputational Risk Management in Central Banks," Discussion Papers 15-16, Bank of Canada.
    • Handle: RePEc:bca:bocadp:15-16
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    References listed on IDEAS

    as
    1. Karyne B. Charbonneau & Lori Rennison, 2015. "Forward Guidance at the Effective Lower Bound: International Experience," Discussion Papers 15-15, Bank of Canada.
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    6. Ianthi Vayid, 2013. "Central Bank Communications Before, During and After the Crisis: From Open-Market Operations to Open-Mouth Policy," Staff Working Papers 13-41, Bank of Canada.
    7. Mike Hannah, 2015. "Being an engaging central bank," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 78, pages 1-83, May.
    8. Andrew Filardo & Guonan Ma & Dubravko Mihaljek, 2011. "Exchange rate and monetary policy frameworks in EMEs," BIS Papers chapters, in: Bank for International Settlements (ed.), Capital flows, commodity price movements and foreign exchange intervention, volume 57, pages 37-63, Bank for International Settlements.
    9. Helge Berger & Volker Nitsc, 2011. "Too Many Cooks? Committees in Monetary Policy," Southern Economic Journal, John Wiley & Sons, vol. 78(2), pages 452-475, October.
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    Cited by:

    1. Araujo, Luiz Nelson, 2016. "Dissemination of Information by the Federal Reserve System: An Overview and Benchmark," MPRA Paper 73185, University Library of Munich, Germany.
    2. Sharon Kozicki & Jill Vardy, 2017. "Communicating Uncertainty in Monetary Policy," Discussion Papers 17-14, Bank of Canada.

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    More about this item

    Keywords

    Credibility; International topics; Monetary policy implementation;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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