Transparency ‘footprints’ of Central Banks: The role of minutes/voting records

In most academic studies the ECB is seen as more transparent than the FED. However, the perception of ECB transparency by the media and market participants is different. This study will examine the role of minutes/voting records as a possible cause of the differences in the perception of transparency between the academics and the media/market participants. As a proxy of how the media/market participants perceive Central Bank transparency, a content/thematic analysis of CNBC video clips was conducted for four central banks – ECB, FED, BOE, and BOJ. The result of the study yielded a three-dimensional ‘footprint’ of the importance of minutes/voting records as perceived by the media/market participants. In the ECB's case, the three-dimensional ‘footprint’ was extrapolated. The three-dimensional ‘footprint’ of the importance of minutes/voting records could be used to value the relative importance of minutes/voting records in transparency/disclosure indexes or as a ‘quick’ proxy for financial market participants to measure the transparency of Central Banks.

► We examine the discrepancy between academics and market participants regarding the transparency of central banks.
► We model the relative importance of minutes/voting records as a three-dimensional ‘footprint’ for four central banks using content/thematic analysis.
► Importance of central bank minutes/voting records increases when there is high uncertainty in the financial markets or when a central bank makes a surprise move.
► Importance of central bank minutes/voting records increases when there is a close vote or controversy by committee members.