erkki liikanen : is more always better? accountability, and the clarity of message transparency, introductory remarks by mr erkki liikanen, governor of the bank of finland, at the panel discussion " is more always better? transparency, accountability, and the clarity of message ", ecb central bank communications conference, frankfurt am main, 14 november 2017. * * * why do we need transparency? is more always better? there are two basic reasons for transparency in monetary policy : the first is public accountability of central banks. the second reason is better policy effectiveness. anders chydenius, the 18th century finnish clergyman and economist drafted the world ’ s first freedom of information act ( enacted in the kingdom of sweden in 1766 ). this was 98 years after the riksbank was founded. chydenius summarized the connection between transparency and political liberty in the following way : " the liberty of a nation is preserved not only by the laws, but by public information and knowledge as to how they are being administered. " 1 chydenius ’ statement presents the accountability argument for transparency in its simplest and the most forceful way. the rule of law alone is not sufficient for freedom, but the transparency of the use of executive power is also necessary. until a generation ago, central banks were rather secretive organizations, shrouded in a kind of monetary mystique. this started to change in the 1990 ’ s, when the independence of central banks rose to the top of the reform agenda, in order to improve the credibility of monetary policy. as central banks became more independent, it was natural that accountability and transparency had to develop as well. citizens and their political representatives needed to be able to monitor how central banks used their independence. considering the ecb, an important forum for its accountability are the regular hearings of the president of the ecb at the european parliament. these hearings are both a forum of scrutiny and a venue for communication of policy goals and strategies. the accountability framework was strengthened further after the ecb was entrusted with the powers of banking supervision in the euro area. since then, also the chair of the supervisory board appears regularly in the european parliament. beyond the formal accountability requirements, the ecb was the first major central bank to organize regular press conferences after each monetary policy meeting of the governing council. they are not just one - directional communication but enable useful interaction between the press and the president and the vice - president of the ecb. a more recent, but a very important step

also a policy adviser with an ambition to design rules to improve international coordination as well as better coordination of domestic economic policies. he prepared a study for the league of nations entitled international currency experience ( 1944 ). this report was distributed to delegates at the united nations monetary and financial conference at bretton woods in july 1944. his study contained many of the seeds of the bretton woods agreement, although he was not among its architects. ragnar nurkse was in favour of fixed but adjustable exchange rates. he understood that a precondition for such an arrangement is an agreement with the major powers on the coordination of economic policies. for it to function smoothly, the major powers would have to pursue disciplined monetary and fiscal policies with the objective of price stability. interestingly, price stability was not among the objectives of the bretton woods agreement. many modern elements were present in the thinking of the economists at the league of nations. nurkse was one of those modernists. endres and fleming ( 1998 ) mention that nurkse's colleagues at the league of nations had recommended rules - based monetary policy and central bank independence already before him ( nurkse joined the league in 1934 ). disciplined monetary and fiscal policies in major countries continue to be a prerequisite for international monetary stability. nurkse would not disagree. central bank independence, a monetary policy strategy based on the objective of price stability, central bank transparency which makes monetary policy predictable, and the elimination of excessive deficits are the cornerstones of macroeconomic policies in europe today. nurkse would not disagree.