Communication for Multi-Taskers: Perspectives on Dealing with Both Monetary Policy and Financial Stability

This paper examines the communications challenges facing central banks who will be sharing responsibilities with other agencies for macro-prudential objectives, in addition to conventional monetary policy goals. Following a description and analysis of surveys of central banks, and the attributes that make up an index of central bank transparency, some policy proposals are made. It is argued that a hybrid of inflation and price level targeting, combined with a requirement by the macro-prudential regulators to issue press releases much like central banks publish an announcement and rationale for the setting of monetary policy instruments, may improve the central bank communication in a post-crisis world.