The Bank of England will no longer hold off-the-record briefings between policymakers and individual private sector firms. This is because of the scrutiny over the links between central banks and finance grows. This move is a permanent step that aimed at improving the transparency of the BoE’s market intelligence gathering operations. Another step is remembered in lifting the veil which hangs over the sometimes-secretive world of central banking.
Break from the BoE’s image, when meetings with private banks in smoke-filled rooms were the norm and its conduct of policy opaque. The European Central Bank faced calls to end its closed-door meetings with private firms, last month. This is after its chief economist was reported to have disclosed an unpublished inflation forecast at one such event. The ECB partly disputed the Financial Times report. Meetings between members of the BoE’s Monetary Policy Committee and private banks had been billed. Comments by policymakers should be limited.
The BoE also publishes details of these meetings in the schedules of MPC members. These are made available to the public. But these events have also led to speculation and rumour among financial traders. Twitter users talked about an MPC member meeting, which is a major bank. The BoE has regular contact with banks. In the United States, Federal Reserve Chair Jay Powell and other Fed officials regularly meet Wall Street bosses and other financial market leaders. The Fed’s communications policy discourages policymakers from conducting private briefings. Two Fed officials were recently forced to sell their individual stock holdings. ECB Chief Economist Philip Lane had to suspend one-on-one meetings with investors. This is due in part to public criticism of such engagements. The BoE will still hold its regular off-record briefings with a group of economists from private finance firms. These meetings differ from closed-door meetings with individual banks.