July 2001

Dear Delegate,

Communications and External Relations for Central bankers

Course outline
Central banks’ ability to communicate effectively with financial markets, the media, government and the public, has become a core skill. This course analyses how changes in the external environment are throwing up unexpected challenges to central banks’ communications strategies, and how central banks can position themselves effectively to meet these challenges and maximise the credibility of policy. Sessions also examine the use of new communications technology and suggest ways of monitoring and measuring performance.

Central bankers have discovered that increased operational independence brings with it demands for increased accountability and transparency. Communications and External Relations for Central Bankers considers how these twin challenges can best be met.

Day one: Communicating Monetary Policy.
The course begins with an analysis of the changing expectations and requirements of important audiences or “constituencies”, notably the government, media, financial markets, academics and the general public. This includes a case study approach examining episodes of successful (and unsuccessful) central bank communications. What are the special difficulties involved in communicating monetary policy decisions? How can a central bank best get across its general message that price stability is in the nation’s long-term interest, even if it means suffering (temporary) high interest rates?

Day two: International best practice.
Discusses the current standards of best practice in this field, and how leading central banks like the Fed and the ECB respond to demands for accountability and transparency. This includes a session on the IMF’s best practice standards of fiscal and monetary policy disclosure.

Day three: Using new technology and the internet.
Examines technological innovations, and how the central bank can exploit the internet and other new communications technology. We also examine how central banks can best use technology to disseminate regular publications to different audiences, and to release market sensitive information.

Day four: Measurement and assessment.
Addresses the crucial issue of performance measurement and assessment. While many communications metrics remain qualitative, we examine schema for evaluating performance, including an examination of private sector approaches to media profile measurement, and the extent to which they can provide useful feedback to official sector institutions..

Who should attend?
Press and public affairs officers from central banks and financial market authorities and the senior staff with managerial responsibility for the function.

Free from direct control by the executive, many central banks now report instead to parliaments.   Both parliamentarians and central bankers must manage this critical interface carefully.  Here, a member of the European Parliament’s Monetary and Economic Affairs Committee (responsible for scrutinising the European Central Bank) examines this evolving relationship.

Communications with financial media
Stephen Timewell - Editor, The Banker magazine

A proliferating financial media plays a key role in moulding public perceptions.  This session considers what drives the news agenda, and how central banks should address this specialist audience.

Reporting Monetary Policy
Alan Beattie, Financial Times

Alan Beattie from the Financial Times examines how the financial press approach the technical business of reporting on developments in monetary policy.

Communications with financial markets
Gerard Lyons - Global Head of Treasury Research, Standard Chartered Bank (invited)

Central bank policy is most effective if market participants see it as credible.  This session explores how markets read central bank actions, and how central banks should adapt.

As the central bank’s role changes, so it must adapt its public face.  A proactive approach is critical.  This session analyses a decade of change at the Bank of England.

Establishing communications:  the European Central Bank
Manfred Körber - Head of External Relations Directorate, ECB

As a new central bank,  the European Central Bank (ECB) has had to develop its external relations approach from a standing start.  Here, one of the key protagonists traces the evolution of the ECB’s stance.

How the Bundesbank talks
Wolfgang Mörke - Head of Press and Public Relations, Deutsche Bundesbank

The Bundesbank is revered in Germany, in part because of a deliberate approach to the public discussion of policy.  Here, the Bundesbank’s head of external relations discusses how the Bundesbank communicates and signals its intentions.

Understanding communications
Hamish McRae - Economics Editor, The Independent

Central banks must address several audiences – governments, media, public and financial markets – while maintaining a consistent message.  This session examines how these conflicting demands can be managed.

For central banks, the internet provides an unparalleled opportunity to meet their transparency obligations, and talk directly to markets and the public.  How can this new media best be exploited?

The internet:  a central banking view
Timo Laurmaa, Bank for International Settlements

As well as providing opportunities, central banks’ use of the internet raises challenges:  what content should be available and how?  Is translation obligatory?  How should senior management calculate costs/benefits?

At the core of the central bank’s role is the credible, reliable and timely dissemination of highly market-sensitive information.  This session examines how the Federal Reserve of New York approaches this key function.

Relations with governments, with international institutions, with local media conglomerates and with non-specialist media present particular challenges in emerging markets.  Often, central banks must tread a difficult path between opposing interests, while nonetheless maintaining their credibility.

Communications: measuring success
Speaker from the Banque de France

Feedback is critical to successful strategy.  This session examines the experience of the Banque de France in communicating its message, and how it has used performance metrics to assess this.