ECB Considers Ending Private Calls to Banks, Investors After Policy Meetings
By Tom Fairless
FRANKFURT -- The European Central Bank is considering
terminating an unusual communications policy whereby its chief
economist placed private calls to banks and investors shortly after
policy meetings, a practice that had raised eyebrows among
financiers and central-bank officials.
Starting in March last year, Philip Lane, the chief economist,
spoke directly with a select group of global institutions in the
hours after the bank's policy decisions, in an effort to clarify
its sometimes-puzzling public pronouncements.
The calls, reported in early December by The Wall Street
Journal, broke with the central bank's usual practice of delivering
information to all market participants at the same time. They were
made to big investors such as BlackRock Inc. and banks such as
Goldman Sachs Group Inc. and JPMorgan Chase & Co.
After the calls were revealed, Mr. Lane initially said he
planned to continue them.
But in a letter to a Dutch member of the European Parliament,
published Friday on the central bank's website, ECB President
Christine Lagarde said the bank was reconsidering the format of the
"The ECB is continually learning and reviewing its policies and
practices with a view to making them as effective as possible --
this is also true for the field of communication," Ms. Lagarde
wrote in the letter, which addressed questions about Mr. Lane's
calls from Dutch politician Derk Jan Eppink.
In the U.S., the Federal Reserve has a blackout period of 12
days that runs until a full day after policy meetings, during which
Fed officials don't speak publicly or privately to investors. The
Bank of England briefs analysts shortly after its policy decisions,
but all analysts are briefed at the same time, and any who want to
Mr. Lane's calls began on March 12, when Ms. Lagarde stunned
traders by suggesting at a news conference that the central bank
wouldn't prop up Italy's bond market. Ms. Lagarde, a former
International Monetary Fund managing director and French finance
minister, hadn't worked in a central bank before she took the helm
at the ECB in November last year.
In her letter on Friday, Ms. Lagarde said Mr. Lane's calls had
sought to "facilitate systematic exchanges on newly published
information," and that Mr. Lane had rotated between leading
financial institutions in an effort to be even handed.
The letter discussed the calls in the past tense. It didn't
suggest any alternative communication strategies that the ECB might
According to his public diary, Mr. Lane called eight global
banks and investors after the ECB's policy meeting on Oct. 29,
including Bank of America and Barclays. His subsequent diary
entries haven't yet been published.
Bankers and central-bank officials had warned that the practice
risked privileging large investors with sensitive information.
Neither Ms. Lagarde's predecessor, Mario Draghi, nor his chief
economist, Peter Praet, made similar calls during their last two
years in office.
Write to Tom Fairless at firstname.lastname@example.org
(END) Dow Jones Newswires
January 22, 2021 14:37 ET (19:37 GMT)
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