Speaking, listening and understanding: central bank communications
The Reserve Bank of New Zealand’s Assistant Governor and General Manager of Economics, Financial Markets and Banking, Christian Hawkesby, spoke at the 11th Annual Commonwealth Bank Global Markets Conference, in Sydney on Monday 28 October, 2019.
Providing clarity about central bank communications, the speech focused on the art of listening and understanding to interpret information from financial markets, and speaking clearly.
“There is a greater expectation from the public that information is easily available and understandable. This has resulted in a wider and deeper engagement with financial markets and society as a whole, with more speeches and publications increasingly used to provide perspectives,” Mr Hawkesby said.
The crux of the message is that central banks grapple with the same uncertainty about economic developments and dynamics in financial markets, and are susceptible to vulnerabilities and challenges in understanding that world.
Outlining the risks and limitations of being too transparent, he added, “A paradox of these limitations is that greater transparency does not necessarily equate to increased clarity for market participants and the general public”.
In closing his speech, Mr Hawkesby talked about the communications challenges ahead faced by the Reserve Bank, especially if monetary policy in New Zealand moves into less conventional territory.