A glitch at another central bank lock-up

One, unnamed, media organization released news about Federal Reserve's June minutes ahead of embargo because of a technical glitch in the Fed's lock-up room. The bug caused other media to report on the minutes with a delay.

Analysts quoted by The Wall Street Journal described the error as significant in an age of near-instantaneous electronic trading:

The Fed didn’t name the news organizations affected by the error Wednesday, but they included The Wall Street Journal and Dow Jones Newswires. Transmission of Dow Jones & Co.’s journalists’ headlines and news articles, scheduled for release at 2 p.m. EDT, was delayed by about 40 seconds, according to Dow Jones & Co. data. The Fed didn’t disclose how much earlier before 2 p.m. one organization was able to transmit its report.

Seems like central bank lock-ups - arrangements designed to provide media with access to sensitive information under embargo - are inevitably prone to error, and the only prudent strategy is to keep the oversight ultra tight.

The good thing about the latest indcident at the Fed is that the US central bank swiftly made a transparent statement admitting and explaning the embargo break:

A technical error occurred Wednesday during the media lock-up for the release of the minutes of the June meeting of the Federal Open Market Committee. As a result of the error in the use of the Federal Reserve equipment that cuts off and enables electronic access from the media lock-up room, one media organization informed us it prematurely transmitted some embargoed information. Our technical error also resulted in some media organizations experiencing a delay in their ability to transmit information.

At the core of this latest central bank embargo break was a technical glitch, and not a human error, which stood behind the credibility-damaging leak of the Reserve Bank of New Zealand's rate cut decision earlier this year.

As I argued on this website earlier, any embargo rules must be kept ultra tight and be reviewed regularly along with advances in technology. The lock-up error at the Fed serves to reinforce my point.