The (Not So) Quiet Period: Communication by ECB Decision-makers during Monetary Policy Blackout Days

Phillipp Gnan and Kilian Rieder

No 15735, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We use confidential data to provide an empirical primer on the European Central Bank's (ECB) monetary policy quiet period between 2008 and 2021. Breaches of blackout rules happen regularly and their frequency is heterogeneous across ECB Governing Council members. We document that quiet period breaches trigger high-frequency market reactions that are up to twice as large as the median market reaction to speeches in inter-meeting periods. Controlling for member and time fixed effects, we find that breaches respond to absolute inflation deviations of policy-makers’ constituencies from the ECB's target and to interest rate spreads inside the euro area. We also exploit plausibly exogenous variation in the ECB's rotational voting schedule to show that non-voting members do not engage in strategic communication during the quiet period to lock in their voting peers.

Keywords: Monetary policy; Quiet period; Rotational voting; Decision-making; Central bank communication; European central bank; Home bias (search for similar items in EconPapers)
JEL-codes: D82 D83 E52 E58 E61 G12 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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