Sep 28, 2022
Bank of Canada vows more transparency after pressure from IMF
BoC's Rogers taking questions from media
The Bank of Canada will begin publishing a minutes-like summary of deliberations by officials after each policy decision in an effort to enhance transparency as it faces one of the most severe tests of its credibility.
The move comes in response to a review by the International Monetary Fund, released on Wednesday, of the central bank’s transparency practices. The Bank of Canada said it will produce summaries roughly two weeks after each policy meeting, starting with the Jan. 25 decision.
“We do expect it to provide a high-level summary of the issues discussed by Governing Council, as well as insight into the key points of focus in their deliberations on economic developments and the risks,” Jeremy Harrison, managing director of the bank’s communications department, said in a statement.
“We also expect it will provide insight into the range of policy options that Governing Council may be considering at any given decision.”
The Bank of Canada has faced criticism in the past for not publishing minutes like the U.S. Federal Reserve, which the IMF said in its report is a practice considered the “golden standard” among inflation targeting central banks.
The need to bolster the bank’s inflation-fighting credibility, however -- with whatever means -- has taken on added urgency after policymakers failed to foresee the extent and stickiness of the surge in consumer prices, and were late to respond.
As a result, the Bank of Canada is engineering one of its most aggressive tightening cycles ever in a bid to catch up. Officials have rapidly raised the policy rate to 3.25 per cent from the emergency pandemic low of 0.25 per cent it was holding at until March. Markets are pricing in another 50 basis point hike at the October meeting.
Harrison said the summaries won’t attribute comments to any individual members on the council. The Bank of Canada doesn’t make policy through a voting system, so no vote records will be published.
The bank said it has also agreed to enhance transparency around its risk management and audit functions.
“We know that by being transparent, we can help all Canadians understand what we are doing and why, and that’s essential for their trust,” Governor Tiff Macklem said in a news release.