Headline that economists welcome changes in Bank of England decision-making procedures caught my attention. The story was underwhelming. Calls for transparency in central banking procedures and policies is supposed to have grown, according to that brief news-story. Not surprising. As returns dwindle – unless one rides bubbles in equity markets combining lots of luck, staying power and unthinking herd-like behaviour that includes faith in Central Banking High-Powered Money – there is increasing desperation to tease out whatever returns are there. So, if central banking transparency helps in that process, why not? It has nothing to do with the economy. It is a pet theory of the financial industry. This news-story does no justice to the other side of the coin on central bank policy-making transparency.
Dr. Y.V. Reddy once said that policy transparency was a public good and that it had to be priced. It did not have to be on offer, for free. I would add that it need not be on offer, in the service of financial industry bonuses.
Finally, I am decidedly uncomfortable that officials’ policy deliberations will be published along with Minutes. Wonder what it would do to the quality of debate and free-wheeling expression of ideas, views and concerns inside the policy portals.