Everyone knows I've been a big public proponent of better RBA governance disciplines and transparency. I'm also a fan of the Bank of England's approach to speaking the truth in speeches. The RBA is far too anodyne on this front. The staff could do well to follow Warwick McKibbin's 'take no prisoners' communications strategy. I know, some readers will think this is madness. My response: life's too short to dissemble.
One thing the RBA should not do is follow the BoE Board's lead when it comes to disclosing voting intentions and individual member opinions. This is madness and makes the central bank impossible to run. Whoever suggested it deserves a nail-gun to the head. How can you ever present a intelligible and consistent 'central bank' message when Board members are mouthing off publicly about why the Governor has got it wrong? This does direct damage to the central bank's credibility, which is its single most important asset. I just read that it's been revealed that the BoE's chief economist voted against the Governor's (and majority Board) decision to keep rates on hold. A horrific management dilemma. No serious public company could be run this way.
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