how you are progressing along that track and that is where the communication is important. given the relatively poor starting point, a high level of communication and transparency was necessary to build credibility as quickly as possible, to enhance the effectiveness of monetary policy and to help anchor inflation expectations. mervyn king described this as ‘ trust building by talk ’. 14 that was very much the goal of communication when inflation targeting was in its infancy. similarly, communication was a mechanism to deliver accountability. as i noted earlier, inflation targeting often went hand in hand with greater central bank independence. the quid pro quo for greater independence was greater accountability. in australia ’ s case, the need for accountability, and communication as one mechanism to deliver that accountability, was reflected in the first statement on the conduct of monetary policy, which stated that ‘ it is important the bank report on how it sees developments in the economy, currently and in prospect, affecting expected inflation outcomes ’. it noted that this would include the statements on monetary policy, public 9 / 14 bis central bankers'speeches addresses and required semiannual appearances of the governor before the parliament. today, the extent and nature of communication have increased still further. the statement on monetary policy is a comprehensive document detailing the assessment of the current conjuncture, the bank ’ s outlook for the economy, the risks and uncertainties around that outlook, and an explanation of the board ’ s assessment of the monetary policy settings. the scope and content of these documents have grown materially over the past 25 years. all monetary policy decisions are accompanied by a statement explaining the basis of the decision ( whether the stance is change or not ). minutes of the board ’ s decision - making meeting are published two weeks later. 15 the number and frequency of speeches by the governor and deputy governor, as well as other senior bank staff, have increased. the financial stability review is published twice each year providing the bank ’ s assessment of those issues. there is a website which makes this material, as well as other material describing the monetary policy framework, readily available to the public. there is an extensive business liaison program and recently an increase in focus on public education about the bank ’ s role. so the volume of communication and overall transparency have increased materially. in considering the changed nature of the communication, it is important to ask two questions : what is the objective of the communication, and to whom are we communicating? one of the critical roles of communication is a vehicle for accountability. that communication is

its refinancing operations back in 2008, and with short incursions into this unknown territory already in 2007. moreover, this practice was later expanded to longer horizons, when policy rates still stood at firmly positive levels. this approach was naturally developed in view of the predominantly bank - based nature of the euro area financial system. it led to a rather passive mode of liquidity injection, very much in the tradition of the lender - of - last - resort function of a central bank. this very important tradition owes much to henry thornton and walter bagehot. but you can read bagehot without knowing what the zlb is and how it affects the ability of a central bank to provide stimulus under conditions of insufficient aggregate demand. the ecb adopted a more active control of balance sheet developments only at a much later stage, in the course of last year, ultimately leading to the adoption of the expanded asset purchase programme ( app ). through the app, via its reliance on outright purchases, the ecb regained a more direct control over the size of the balance sheet. and it bis central bankers ’ speeches was in this context that short - term rates effectively had to reach a lower bound configuration. i think there is little disagreement that, in terms of stimulating demand, this is a precondition for realising the maximum impact of large - scale purchases of securities of various types and maturities via rebalancing and signalling effects. let me briefly elaborate on why i said that short - term rates “ effectively ” had to reach a lower bound configuration. the pre - crisis view, with its focus on the “ zero ” lower bound created a misleading label. given that the interest rate on sight deposits held with the swiss national bank ( snb ) is currently standing at minus 75 basis points, we can rule out that the constraint binds strictly at zero. in the euro area, the interest rate on the deposit facility stands at minus 20 basis points. we have got used to the fact that money market rates ( as well as a good range of other interest rates ) can be negative. so, one thing we have surely learned is that “ zero is rather something minus ”. in this particular sense, the “ zero ” lower bound has turned out to be less binding than previously thought. in the euro area, negative rates have been powerful in propagating the policy stimulus for two reasons. 6 first, in terms of available policy instruments, negative rates can, to a certain extent, be seen