Conversely, the second worry is that broadening central banks’ responsibilities could undermine their core monetary policy function. In the pursuit of its financial stability mandate, a central bank could be drawn into politically contentious areas such as housing policy and income inequality. Greater coordination with fiscal policy could also cause the central bank to be pressured into monetary financing or even fiscal dominance. On a general level, combining monetary policy and financial stability may bring back the time inconsistency problem, which is exactly why central banks were granted independence in the first place. The post-GFC situation of central banks can be summed up as follows. The fiscal consolidation and only partial structural reforms undertaken by many governments made central banks more or less the only game in town. And as economies weren’t running satisfactorily, this game wasn’t cast in a good light. The long period of exceptionally low nominal and real interest rates spurred an intensive examination of the possible consequences. These include growing indebtedness, overvalued asset prices, underestimated risks, misallocated loans and resources, and lower productivity. However, it will take a long time to properly assess the impacts of other unconventional instruments. To quote Charles Goodhart: “Central bank independence was nice while it lasted, but it owed a great deal to the supporting conditions that enabled it to achieve such great success in its early years. Rest in peace.”  The rebirth of the fiscal-monetary mix?

As a rule, these estimates coincide. Norges Bank places considerable emphasis on the transparency and communication of monetary policy. Norges Bank’s analyses and the background for the Bank’s interest rate decisions are published regularly. The inflation outlook is presented three times a year in Norges Bank’s Inflation Report. Further assessments are presented every six weeks in connection with the Executive Board's monetary policy meetings. The Bank also reports on the implementation of monetary policy in its annual report. If there are significant deviations between actual price inflation and the target, the Bank will provide a thorough assessment in its annual report. Particular emphasis will be placed on any deviations outside the interval +/- 1 percentage point. Transparency about the intentions, strategies and implementation of monetary policy make it easier for economic agents to evaluate monetary policy. If monetary policy is predictable, an important source of uncertainty is reduced and the interest rate that is necessary to achieve the inflation target - all other thing being equal - is lower. A predictable monetary policy can thereby contribute to enhancing the efficiency and impact of monetary policy. Even though there is not necessarily a one-to-one relationship between transparency and predictability, some degree of transparency is probably a precondition for achieving monetary policy credibility. BIS Review 74/2001  9  In Norway at least it appears that transparency in Norges Bank's interpretation of the mandate and in the implementation of monetary policy has contributed to a somewhat more predictable monetary policy.