Central Banks in Parliaments: A Text Analysis of the Parliamentary Hearings of the Bank of England, the European Central Bank and the Federal Reserve

52 Pages Posted: 8 Jul 2020

See all articles by Nicolò Fraccaroli

Nicolò Fraccaroli

Brown University - Watson Institute for International and Public Affairs; University of Rome Tor Vergata, Faculty of Economics, Department of Economics, Law and Institutions

Alessandro Giovannini

European Central Bank (ECB) - Directorate General International and European Relations

Date Written: July, 2020

Abstract

As the role of central banks expanded, demand for public scrutiny of their actions increased. This paper investigates whether parliamentary hearings, the main tool to hold central banks accountable, are fit for this purpose. Using text analysis, it detects the topics and sentiments in parliamentary hearings of the Bank of England, the European Central Bank and the Federal Reserve from 1999 to 2019. It shows that, while central bank objectives play the most relevant role in determining the topic, unemployment is negatively associated with the focus of hearings on price stability. Sentiments are more negative when uncertainty is higher and when inflation is more distant from the central bank’s inflation aim. These findings suggest that parliamentarians use hearings to scrutinise the performance of central banks in line with their objectives and economic developments, but also that uncertainty is associated with a higher perceived risk of under-performance of central banks.

JEL Classification: E02, E52, E58

Suggested Citation

Fraccaroli, Nicolò and Giovannini, Alessandro, Central Banks in Parliaments: A Text Analysis of the Parliamentary Hearings of the Bank of England, the European Central Bank and the Federal Reserve (July, 2020). ECB Working Paper No. 20202442, Available at SSRN: https://ssrn.com/abstract=3646000

Nicolò Fraccaroli (Contact Author)

Brown University - Watson Institute for International and Public Affairs ( email )

111 Thayer Street
Box 1970
Providence, RI 02912-1970
United States

HOME PAGE: http://https://watson.brown.edu/rhodes/people/nicol-fraccaroli

University of Rome Tor Vergata, Faculty of Economics, Department of Economics, Law and Institutions ( email )

Via Columbia, 2
Rome, 00133
Italy

HOME PAGE: http://https://sites.google.com/view/nfraccaroli/home

Alessandro Giovannini

European Central Bank (ECB) - Directorate General International and European Relations ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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