to take a euro area, rather than national, perspective. the ecb does make additional efforts at communication of other kinds, including a regular press conference. clearly there are views on both sides of this question, which reflect the different institutional arrangements across countries. this is why we have argued over time that, in the pursuit of the optimal degree of transparency, it would not make sense to “ cherry pick ” the high transparency aspects of every other system and assume that they should simply be grafted onto the australian system. the nature of the reserve bank board – a majority of whom are part - time members, drawn from various parts of the australian community, but seeking to make decisions in the national interest as opposed to any industry, geographical or sectional interest – needs to be considered when thinking about disclosure practices. it is also important, i think, to articulate the point that there are reasonable limits to transparency in any system. it is not the case that releasing more material is always, by definition, going to lead to better informed public debate or better policy decisions. in contemplating the release of minutes of meetings in particular, and the form any such release might take, we need to balance a legitimate desire for information and accountability against the need to maintain a frank, open discussion at the meeting. at many meetings i have taken part in over the years, people have considered various arguments that ultimately were found to be unconvincing, but which did need to be examined in the interests of reaching a balanced decision. people also change their minds in the course of a meeting – and one would hope that that happens occasionally, since one of the key benefits of a having meeting is to learn from and respond to the views of the other participants. it is unlikely that these dynamics of a meeting could be sustained if every utterance were disclosed. the incentive could easily arise for people to be much more cautious in what they said, and to come to the meeting with a pre - written statement, rather than to engage in a genuinely interactive discussion. that would reduce the quality of the discussion and, ultimately, of the decision. and it is the quality of the decision, after all, which we should be seeking to maximise. what all of this means is that a decision to release minutes should not be taken lightly. such documents have to be written carefully, taking into account the institutional structure, including the nature of the board, and the need to preserve an environment of candid discussion. rba minutes that said,

which it has used its powers to pursue its statutory goals. the framers of the reserve bank act 1959 nearly 50 years ago very wisely placed the parliament squarely in the centre of accountability arrangements. in recent times, the commonwealth authorities and companies act 1997 has required annual reporting of the relevant agencies, of which the reserve bank is one, but from the very beginning the rba was required to issue an annual report to parliament. yet the requirements for more frequent communication have grown over the years. in part this reflects the increased development of capital markets and the speed and force with which they respond to economic developments. markets crave information, and the central bank ’ s assessment of the state of the economy is one part of the information set. in part, the demand for communication accompanies increased operational independence for central banks. when the central bank is making an important policy decision under an authority delegated by the parliament, as opposed to implementing a decision made by a minister – and that is what we are doing in the case of monetary policy – there will naturally be an expectation for accountability. it also reflects the general development of the community ’ s expectation to be more informed about important matters. that is a natural concomitant of a more affluent, educated and mature society. as such, it is something to be welcomed. there is also the role of the media. our political leaders are expected to answer questions from the media much more frequently, and across a much broader range of issues, than once was the case. 1 some of this spills over onto other institutions, including corporations and central banks. the media is responding to market demand for information here, but as in any other competitive industry, media organisations are also seeking to create new markets by supplying more intensive, more frequent coverage of more issues, including economic policy. the second rationale for more communication is the desire for more effective policy. some policy actions have as much effect through conditioning expectations as by constraining current behaviour. this is very much true in the case of monetary policy. a change in the cash rate of modest size has only a pretty small impact on the economy. but expectations about a sequence of possible future interest rate changes can often be more powerful. what a central bank says, as much as what it does, affects those expectations. even more important are expectations of future inflation. when people expect prices to rise rapidly, they bring forward purchases, put up their own prices, demand higher wages and so on. that