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

40 Pages Posted: 21 Jun 2022 Last revised: 16 Sep 2022

See all articles by Phillipp Gnan

Phillipp Gnan

Vienna University of Economics and Business

Kilian Rieder

Oesterreichische Nationalbank (Eurosystem)

Date Written: September 12, 2022

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 more than 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

JEL Classification: D83, E52, E58, E71

Suggested Citation

Gnan, Phillipp and Rieder, Kilian, The (Not So) Quiet Period: Communication by ECB Decision-Makers During Monetary Policy Blackout Days (September 12, 2022). Journal of International Money and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4138865 or http://dx.doi.org/10.2139/ssrn.4138865

Phillipp Gnan (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

Kilian Rieder

Oesterreichische Nationalbank (Eurosystem) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

HOME PAGE: http://kilianrieder.com/

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