European Central Bank President Mario Draghi is controlling word inflation.
The CHART OF THE DAY shows that the opening statements Draghi delivered after the central bank’s monthly policy-setting meetings have averaged 1,422 words since he took office on Nov. 1. That includes a low of 1,128 words at yesterday’s briefing and marks a decline from an average of 1,870 words his predecessor, Jean-Claude Trichet, used in his final six months at the helm of the Frankfurt-based central bank.
Central banks around the globe are using language to signal policy changes and steer market expectations. Draghi made the longest introductory statement in December, exceeding Trichet’s average by just five words, after the ECB lowered its benchmark interest rate a second time in as many months to a record low and introduced unprecedented liquidity measures to aid banks.
Draghi “has clearly got a different style of doing things,” said Howard Archer, chief European economist at IHS Global Insight in London. “When I went to the printer today there were only two pages.”
In the U.S., Federal Reserve Chairman Ben S. Bernanke, who began giving press conferences last year, used 1,971 words to explain the central bank’s monetary policy thinking in January. Six months into his new job, Draghi indicated yesterday that he’s already under pressure to limit his remarks.
“I’ve been told I should give short answers,” he said after responding to a reporter’s question.