(Ottawa) The Bank of Canada will begin publishing detailed summaries of its monetary policy deliberations next year, following a recommendation from the International Monetary Fund (IMF).
Posted at 3:37 p.m.
The move comes after the IMF released a report on Wednesday examining the central bank’s transparency practices.
The summaries will provide more transparency to the public about what the bank is doing and provide insight into the decision-making process, said Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO Capital Markets.
” [C’est] definitely an interesting and welcome addition from the Bank of Canada,” he said.
In its report, the IMF says the Bank of Canada “sets a benchmark for transparency,” but still sets out 10 recommendations to help it improve, including publishing a detailed summary of policy decisions. monetary policy of the board of directors.
“The monetary policy framework [de la Banque du Canada] is comprehensive, transparent and understandable, although there is room for greater transparency with regard to policy deliberations,” the IMF report said.
In response to the IMF report, the Bank of Canada has committed to publishing summaries approximately two weeks after each monetary policy decision beginning in January.
The summaries will not attribute any content to individual board members and will not provide a vote tally, since the bank’s deliberative process does not include voting.
The U.S. Federal Reserve already releases minutes, released three weeks after their meetings.
However, Reitzes pointed out that a key difference between the Bank of Canada and the Federal Reserve was that the Bank of Canada’s decision-making process is consensus-based, unlike the Fed, where the 12-member federal committee vote on monetary policy decisions.
“Once they have made their decision, everyone has the same point of view. So it’s a bit different, explained Reitzes. It changes things up a bit and maybe makes it a bit more difficult to give a good color to the conversation that they are having at the board of directors. »
The Bank of Canada also said it had agreed to improve the transparency of its risk management and audit functions, as well as strengthen its public communication efforts.
“We know that by being transparent, we can help all Canadians understand the how and why of what we do – and their trust in us depends on it,” said Bank of Canada Governor Tiff Macklem.
The Bank of Canada currently issues a statement when it makes its rate decision, but does not provide a record of its deliberations. Four times a year, it also publishes its Monetary Policy Report, which includes its most recent outlook for the economy, as well as its rate decision.
The IMF report is part of a pilot project to assess central bank transparency practices globally.
As part of the review, a team of independent experts met with central bank staff and management, as well as a range of stakeholders, including members of academia, think tanks and parliament, as well as market participants and journalists.
Among the other recommendations was to communicate more frequently with the public using “plain language” to promote financial stability.