ECB Sets Out Speaking Guidelines Five Months After Coeure Slip

  • Market-sensitive comments to be made immediately available
  • Guidelines don't apply to supervisory dialogs with banks

The European Central Bank set out guidelines on external meetings by Executive Board members, five months after it was criticized for the release of information at a restricted dinner event.

Board members established principles that include the immediate release of speeches or real-time reporting at events where the remarks could be seen as market sensitive. At closed-door events and bilateral meetings, policy makers will ensure that no market-moving information is released.

“The communication policy of the ECB is an essential part of its accountability and good governance obligations,” the ECB said in a statement on its website on Tuesday. “Regular contacts and interaction with members of the public, representative associations and civil society provide relevant input and information that help Executive Board members to understand the dynamics of the economy and financial markets and its broader societal context.”

The revamp of the Frankfurt-based ECB’s practices can serve as an example for other central banks gauging how best to balance transparency with the need to get feedback from investors. The latest guidelines won’t apply to supervisory discussions between the central bank and the euro-area lenders it oversees in its role as the region’s banking watchdog.

Officials will refrain from giving personal views on the state of the economy or the financial sector unless those views have already been expressed publicly, the ECB said.

While the rules are specifically written for Executive Board members, at least two national central banks are considering adopting them, according to people familiar with the matter.

Coeure Speech

The roots of the initiative lie in a May 18 speech by Executive Board member Benoit Coeure in London at a closed-door dinner, which was co-hosted by a research group financed by hedge fund Brevan Howard Asset Management. Coeure said the ECB would boost asset purchases before the summer. Euro-area bonds rallied the following morning when the text was published on the central bank’s website.

The incident attracted the attention of the European Union ombudsman, who asked the ECB to explain what happened and what steps would be taken to prevent a repeat. President Mario Draghi said in June that the timing of the publication of the information was a “mistake” and the institution would review its policy on speaking engagements. Coeure said in August that he had personally decided he would no longer speak at events organized by banks.

Board members are also covered by existing rules including its ethics framework.

Fed Rules

The U.S. Federal Reserve tells its officials to “refrain from describing their personal views about monetary policy in any meeting or conversation with any individual, firm, or organization who could profit financially from acquiring that information unless those views have already been expressed in their public communications,” according to a document on the U.S. central bank’s website.

Even so, the Fed’s rules haven’t protected it from controversy. Medley Global Advisors published details of a September 2012 policy meeting one day before minutes of the session were released by the central bank. Fed Chair Janet Yellen said in May that the U.S. Department of Justice has joined an investigation into the leak. Political-intelligence firms such as Medley charge fees for exclusive information gleaned through access to government officials and influencers.

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