ECB policy transparency increases by another notch

For the second policy announcement in a row, the ECB expanded the content of its standard press release to include information on its use of policy instruments other than just interest rates.

As far as I know, the first to point out was Wall Street Journal ECB correspondent Todd Buell in his Twitter news feed:

Up until January this year, the ECB's press releases - carrying an unexciting headline "Monetary policy decisions" - revealed solely the news on the euro area central bank's interest rate decisions.

The press release is routinely read by a member of the ECB's press office to journalists across the euro area via a conference call that begins precisely at 1:45 p.m., just as the press release is being published on the official website. That is why Buell referred to "a 1:45 CET call" in his tweet.

The ECB's March release marked a break with the previous practice as it for the first time included also information about decisions related to the use of instruments other than interest rates, such as asset purchases and long-term refinancing operations.

In April, the press release once again again made a reference to the ECB's use of non-interest rate tools:

Regarding non-standard monetary policy measures, we have started to expand our monthly purchases under the asset purchase programme to €80 billion. The focus is now on the implementation of the additional non-standard measures decided on 10 March 2016. Further information on the implementation aspects of the corporate sector purchase programme will be released after the press conference on the ECB’s website.

If confirmed as the standard practice, this would mark another important step in heightening the ECB's policy transparency. It follows earlier transparency-enhancing steps, which included setting rules for Executive Board member meetings and speaking engagements.

Central bank transparency is, in my view, a key precondition for successful communication. It promotes confidence, and in turn credibility.

By becoming more transparent on its policy decisions in the post-meeting press release, the ECB is making it easier for its President Mario Draghi to focus on communications in his closely-watched press conference: That is on explaining the just-announced decisions clearly and concisely.