Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/83432 
Year of Publication: 
2012
Series/Report no.: 
IES Working Paper No. 25/2012
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
We develop a comprehensive index of the transparency of central banks regarding their policy framework to promote financial stability for 110 countries from 2000 to 2011 and examine the determinants and effects of this transparency. We find that the degree of transparency increased in the 2000s, though it still varied greatly across the countries in our study. Our regression results suggest that more developed countries exhibit greater transparency, that episodes of high financial stress have a negative effect on transparency and that the legal origin matters, too. Importantly, we find that transparency regarding the level of financial stability is strongly affected by monetary policy transparency. The central banks that have a transparent monetary policy are more likely to show increased transparency in their framework for financial stability. Our results also suggest a non-linear effect of central bank financial stability transparency on financial stress. Unless the financial sector experiences severe distress, greater transparency is beneficial for financial stability.
Subjects: 
financial stability
transparency
central banks
JEL: 
E52
E58
Document Type: 
Working Paper

Files in This Item:
File
Size
674.02 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.