Documents seen by sources says that at today’s annual finance ministers meeting in Athens there are going to be unofficial talks on synchronising rate meetings. The documents say that due to constant market volatility surrounding meetings, a move to limit the usual market choppiness would soothe markets. Having policy meeting bi-annually would also mean reduced volatility in money markets. One source was quoted as saying it’s best to have a concentrated single period of volatility twice a year than several every month.
“Just imagine how peaceful the market would be if these risk events were only twice a year. It would be less stress for the market as well as less stress for central bank members to have to make these hard decisions everytime. People don’t realise the stress we go through in deciding rates”
One idea touted on the synchronisation would be for the central bank governors to travel to one of the different timezones each time to release their decisions. Members would sit alongside each other and in front of cameras and news agencies would each raise a sign simultaneously with their respective announcement.
Aside from the main agenda, finance ministers often have unofficial side talks where they chew over different ideas. It’s not clear whether any of the central bank governors have been consulted on the moves just yet.
It’s an interesting idea and it would mean we don’t go through the wringer every rate meeting announcement.
What do you guys and girls think?
The future of rate meetings?
