were unanticipated. this encouraged obscurity over openness and clarity. however, lost in the debate after lucas ’ statement was the message that monetary policy always affected nominal variables like inflation, even if fully anticipated. two nobel laureates in the 1980s, two economists, also nobel winners, finn kydland and ed prescott, argued that fully transparent rules rather than discretionary policy were more efficient and credible. bis central bankers ’ speeches this was the beginning of the push towards rules over discretion and greater central bank transparency. change in us fed the most eloquent illustration of this shift from obscurity towards transparency is the change in the communication strategy of the us fed. it is hard to imagine from today ’ s perspective, but prior to 1994, the us fed did not disclose the fed funds rate ; the market was supposed to infer the rate from the timing, sequencing and magnitude of the fed's open market operations. in sharp contrast, today the fed not only announces the rate but also gives a clear indication of future policy trajectory. communication as policy – extended period sometimes, communication, instead of being a vehicle for policy, becomes the policy itself. drawing yet again from the us experience during the crisis, the fed realized that its repeated announcement of keeping rates low ‘ for an extended period ’ led markets to reach a certain inference on what “ extended period ” could mean. in this context, some policy analysts argued that a step that the fed should modify the language of the statement to communicate to investors that it anticipates keeping the target federal funds rate low for a longer period than what the markets were factoring it to be. in fact, the fed did just that – by saying explicitly that the low interest rate regime will last into 2014, much more specific that what the market wanted. yet another factor that has motivated central banks into placing larger emphasis on communication is their hard earned autonomy in the years before the crisis. central banks have increasingly embraced more open communication to counter the criticism that an autonomous central bank comprising unelected decision makers was inconsistent with a democratic structure. communication in reserve bank in the reserve bank, we have tried to improve communication not only on monetary policy but across the entire spectrum of our mandate. we have make efforts to demystify the reserve bank. we continue to make explicit efforts to improve the communication of the reserve bank. i. streamlined the policy documents ii. forward guidance – manage the risk that market does not ignore the conditionality and

mario draghi : interview with der spiegel interview with mr mario draghi, president of the european central bank, and der spiegel, published on 30 december 2013. * * * spiegel : mr draghi, do you know andrea nahles? draghi : i have heard the name before but i don ’ t know her personally. spiegel : ms nahles is the new german labour minister and boss of jorg asmussen, your former colleague in the executive board of the ecb. that he gives up this prestigious job has caused great surprise in germany. did you chase him out? draghi : jorg and i had an excellent personal and professional relationship. i consider it as a great loss for us that he is returning to the government. of course we did not agree on every occasion. spiegel : asmussen is the third german central banker to give up his job prematurely, after bundesbank boss axel weber and the former ecb executive board member jurgen stark. why aren ’ t the germans happy at the ecb? draghi : you can ’ t compare these cases. jorg has made it clear that it was only family reasons which prompted him to go back to berlin. i have no reason to doubt that. spiegel : in any case, weber and stark resigned because of your policy, which led to your famous remark in london a year and a half ago about doing “ everything necessary ” to save the euro. that means, in an emergency, buying up the government bonds of the crisis - ridden countries and taking on risks amounting to billions for which in the end german taxpayers above all would be liable. can you understand that many german citizens are at odds with this? draghi : weber and stark resigned before my arrival at the ecb. but the truth is that conditions in the euro area have improved considerably since then. consider the latest developments : crisis - ridden countries such as ireland and portugal are exiting the bailout programme, the risk premia for loans to crisis - hit countries in southern europe are declining, and investors from all over the world are once again investing in europe. in other words, most of the financial - economic data are turning in the right direction. spiegel : are you saying the euro crisis is over? draghi : no, but the fears felt by some sectors of the public in germany have not been confirmed. what haven ’ t we been accused of? when we offered european banks