Sunday, July 27, 2008

RBI transparency and what can be done about it

In March 2009, Dincer and Eichengreen wrote an NBER working paper where they found that RBI was one of the least transparent central banks in the world.

Today, on voxEU, there is an article describing a new paper on the subject: Central bank independence and transparency: Evolution and effectiveness by C.Crowe and E. E. Meade, European Journal of Political Economy which has a fresh attack on the problem of measurement of central bank transparency. They find that RBI transparency worsened between 1998 and 2006, and that the 2006 level was amongst the worst in the world.

The first task for the new RBI governor is to implement the article by Helene K. Poirson which explains nuts and bolts about what is wrong with RBI communication, and how this can be addressed. I think that a critical element of that is better data disclosure: RBI needs to start releasing currency trading data on a daily basis.

1 comment:

  1. Please see my comment on transparency in SEBI:
    http://spparekh.blogspot.com/2008/07/transparency-in-regulators.html

    ReplyDelete

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