European monetary system and european currency

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Over the years, each national central bank had developed its own strategy and, linked to this, its own "monetary policy language" for communicating with the public in the nation it served. This language reflected the unique circumstances of the country in question. The process by which the public learnt this monetary language from the statements and behaviour of the national central bank was largely subconscious. Over time, the strategies and the related language and conventions of monetary policy came to be so well understood as to be almost second nature. In these circumstances, private economic behaviour was shaped by the monetary policy environment.

Many of us have experienced the problem of trying to learn a second language in adult life. This rarely comes as easily as learning your native tongue as a child. It is certainly not a subconscious process, but rather one that requires effort and perseverance. It is often difficult to overcome the habits and conventions of one's first language, which are inevitably somewhat at odds with those of a foreign tongue. Of course, it is easier to learn a language that shares common roots with one's own. Nevertheless, to obtain any degree of fluency, there is no alternative to long hours practising pronunciation, studying grammar and learning vocabulary. Even then, the idioms and slang of the new language are sometimes hard to follow. There are no easy short cuts.

With the adoption of the euro last January, the public, financial markets and policy-makers in the euro area have all had to get used to a new monetary policy environment and have, thus, had to learn a new "monetary policy language". The Eurosystem's monetary policy strategy has been designed, in part, to make this learning process as straightforward as possible. Continuity with the successful strategies of the national central banks prior to Monetary Union was one of the guiding principles governing the selection of the monetary policy strategy. Nevertheless, given the changed environment for monetary policy, a new strategy with a new vocabulary had to be developed, reflecting the unique and novel circumstances facing the Eurosystem.

Some commentators have suggested that the Eurosystem simply adopt the strategy used by another central bank or by a national central bank in the past. Tellingly, such observers often suggest the strategy they know best: Americans suggest using the Federal Reserve as a model; Britons, the Bank of England; Germans, the Bundesbank. However, the Eurosystem cannot simply adopt a strategy designed by another central bank for a different currency area under different economic circumstances. A strategy that might have been suitable in one situation may be quite inappropriate for the unique and novel circumstances facing the Eurosystem, given the very different economic structure and environment confronting it.

A key feature of the ECB's communication policy is the monthly press conference given by the ECB's Vice-President and myself, usually immediately following the first Governing Council meeting of each month. During these press conferences, I make an introductory statement summarising the Council's discussions and conclusions before answering questions from journalists. As the statement is agreed, in substance, with all the Council members beforehand it is similar to what others call minutes. The press conference provides prompt information in an even-handed way, and it offers the opportunity for immediate two-way communication. As far as I am aware, no other central bank communicates with the public in such a prompt manner immediately after its monetary policy meetings.

These press conferences are a tangible expression of the Eurosystem's commitment to be open, transparent and accountable in its conduct of monetary policy. In my view, our commitment to openness should not be in doubt. However, ensuring that this openness translates into effective communications continues to be a challenge. Journalists, financial markets and the public are still learning the new strategy and language of monetary policy in the euro area.

By its nature, the challenge of improving communications between the Eurosystem and the public is two-sided. On the one hand, the ECB must use a clear and transparent language consistent with the strategy it has adopted. It must help the public understand the changes of emphasis and communication necessitated by the new monetary policy environment in Europe. We have made important progress in this regard over the last eight months, but I acknowledge that we still have some way to go. The ECB must do its utmost to be understood by its counterparts in the media that act as important intermediaries to the public at large. By learning from one another, we can improve the transparency, democratic accountability and effectiveness of the single monetary policy.

Реферат опубликован: 12/08/2008