Communicating About Macro-prudential Supervision - A New Challenge for Central Banks

摘要

In response to the financial crisis of 2007-10, many central banks have been given responsibility for macroprudential supervision. This paper argues that central bank communication will play a central role for that purpose, and makes the point that it should be generally geared towards clarity, transparency and predictability, in order to enhance the effectiveness of macroprudential policies and ensure central bank accountability. Moreover, central banks must manage expectations by clearly communicating what macroprudential policy can achieve, and what its limitations are, to counteract reputational risks. This paper also provides empirical evidence showing that financial markets react significantly and systematically to central bank communication about financial stability issues. However, some forms of communication - such as through speeches - may at times raise volatility and uncertainty, in particular during crises, thus underlining theimportance of choosing carefully a communication strategy on macropru-dential policy which is suited for a given market environment.