Federal Reserve Bank of San Francisco President John Williams said the U.S. central bank has taken steps toward openness that won’t be undone.
“The Fed’s move out of the shadows has been at times slow and hasn’t always been voluntary,” Williams said in an essay in the San Francisco Fed’s annual report posted on its website today. “But the fact is that this greater openness is genuine, it’s positive, and it’s irreversible.”
Williams used his essay to summarize steps the central bank has taken to explain its policy process. These have included last year’s decision to have Fed Chairman Ben S. Bernanke start giving press conferences and the adoption of a 2 percent inflation target in January. Williams didn’t address the outlook for monetary policy or the economy in his essay.
“I am proud to say that we’ve gone from being behind the curve relative to other central banks to becoming one of the leaders in transparency, accountability and openness about monetary policy,” he wrote.
He said the Fed must continue its efforts, without identifying specific steps.
“When the public better understands what the Fed is trying to do, uncertainty about its policies is reduced, and households and businesses are able to make spending and investment decisions with greater confidence,” he said.
Some Steps Involuntary
Williams said the Fed’s transparency steps haven’t always been voluntary. He spoke about the disclosure of emergency lending programs required by the 2010 Dodd-Frank Act and said that the measures “represent a reasonable balance between accountability and transparency on the one hand and, on the other hand, the need to guard against panics and bank runs in the midst of a crisis.”
Williams, 49, became the president of the San Francisco Fed in March 2011. His district includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah and Washington.
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