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No news, good news – Transparency and communication in monetary policy

Meeting of the European Business Press, Zurich, 16.06.2006

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With the introduction of its new monetary policy concept in 2000, the Swiss National Bank enhanced the transparency of its monetary policy. The Swiss National Bank communicates more openly, because it believes that monetary policy is most effective and least disruptive, when it is predictable. Improved predictability of monetary policy, however, requires not only a systematic communication of monetary policy objectives and inflation forecasts. Central banks must also ensure the credibility of their announcements by matching their words with their actions. A critical press can assist central bankers in maintaining credibility by scrutinizing the congruency of monetary policy with stated objectives.