DP15735 Who Talks During Monetary Policy Quiet Periods, and Why? Evidence from the European Central Bank's Governing Council

Author(s): Phillipp Gnan, Kilian Rieder
Publication Date: January 2021
Date Revised: July 2021
Keyword(s): career concerns, central bank communication, Central bank transparency, decision-making, European Central Bank, Home Bias, leaks, monetary policy, quiet period, rotational voting
JEL(s): D82, D83, E52, E58, E61, G12
Programme Areas: Monetary Economics and Fluctuations
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15735

We provide the first systematic analysis of individual monetary policy-makers' incentives to communicate during quiet periods in the run-up to policy meetings. Drawing on ECB proprietary sources, we construct a novel statement-level data set documenting the evolution of quiet period communication by ECB Governing Council members between 2008 and 2020. We find that members' policy-making experience and expertise are robustly associated with breaches of quiet period rules. Exploiting plausibly exogenous variation in the ECB rotational voting schedule, we show that non-voting members do not engage in strategic communication during the quiet period to lock in their voting peers. Finally, we review the ECB-internal classification of statements into breaches and non-breaches. We argue that this classification is prone to loopholes and appears to under-report non-compliance by ECB Executive Board members before 2014.