Transparency

Transparency and openness are words of the modern era, underpinned by the general belief that democracy is the best form of government. One institution which prefers to remain opaque is the Federal Reserve which has been discussing for over a year how to improve communications. Last week Jean-Claude Trichet, President of the European Central Bank, held a press conference to try to calm nerves amidst the markets' collapse. Ben Bernanke, however, remained silent: apparently the Fed believed that any reassuring statement could have in fact panicked investors even more as it would have been such an extraordinary event. The Fed is the only central bank amongst the Group of Seven not to hold regular press conferences. Today it's going to make an announcement about interest rates, which will almost certainly stay at 5.25%, and we're waiting to see what comments it makes about the economy. Bernanke's cautious about saying anything after remarks he'd made at a drinks party last year were misinterpreted, leaked to the press and caused a huge drop in the bond market.