s operation. congressional oversight of the federal reserve goes back to the founding of the central bank in 1913. however, the nature and purpose of oversight has changed overtime. since 1978, the federal reserve has been subject to biannual oversight hearings before the senate and house banking committees. several other countries have similar arrangements where the central bank periodically appears before a committee of parliament. parliament in new zealand also has a role in monitoring the bank's conduct of policy. by statute, each monetary policy statement is referred to parliament's finance and expenditure committee. that committee, with the assistance of its own professional adviser, can choose to extensively scrutinise the extent to which policy was, and has been, conducted consistent with the policy targets agreement. additionally, the office of the auditor general – an agent of parliament, is also able to commission quite extensive investigations into the activities of the bank. similarly, the australian parliament undertakes particularly close scrutiny of interest - rate issues and associated economic policy through the reserve bank ’ s appearance before the house of representatives standing committee on economics, finance and public administration. this is the main mechanism through which the reserve bank is accountable to the people of australia. as with the case of the media, the central bank ’ s interface with the legislature needs to be managed strategically, so as to enhance the former ’ s credibility to the public which, as discussed earlier, is a necessary condition for effective transmission of monetary policy. mr. chairman, turning to zambia, some seven years ago we at the bank of zambia commenced media seminars in which we invited a cross - section of participants from media institutions to explain our monetary policy to them. we also used these seminars to educate members of the media on basic economic concepts. this exercise was to a great extent driven by our alarm at the level of misunderstanding of monetary policy issues and decisions by the media, and their failure to communicate discussions on monetary policy effectively to the public without simply copying or paraphrasing a press statement or simply printing opposing quotes from favoured commentators on economic issues. i must admit here that initially this seemed to cause more harm than good – a little knowledge truly did seem a dangerous thing now that we had opened ourselves up to the media. the greater access to central bank officials and information, e. g. through our website, without the full understanding of issues on the part of journalists seemed to fuel erroneous stories. however, our perseverance over time has meant that the level of understanding and quality of questions

expectations of households and firms – either implicitly or explicitly. central to the success of such a strategy is the extent to which central banks have credible monetary policy frameworks and key pillars in such a framework are the ability to communicate policy in a predictable and intelligible way to the public – with the media playing an important role in this process – and the notion of accountability to an appropriate body whether this is the minister of finance, the legislature or both bodies. mr. chairman, by publicising the actions of the central bank, the media has become an important agent in facilitating the desired behavioural response of economic agents to monetary policy actions of the central bank. due to the critical role of the media in the successful execution of public policy, the central bank needs to have a clear communications policy that supports the goals of the central bank. one of the major goals of communication policy, for instance, is to help anchor inflation expectation by promoting credibility and understanding of monetary policy. indeed a notable change in central banking over the past 15 years has been a world - wide movement toward increased communication by central banks about their policy decisions, the targets that they seek to achieve through those decisions, and their view of the economy's likely future evolution. mr. chairman, it is argued that increased willingness to share the central bank's own assumptions about future policy with the public has increased the predictability of policy, in ways that have improved central bank's ability to achieve their stabilization objectives. public information serves the dual role of conveying fundamental information as well as serving as a focal point for better coordination. as financial markets become more efficient in a country, and as the economy becomes more open, the central bank ’ s communication policy needs to adapt to these on - going changes. furthermore, given the complexity of formulating monetary policy and getting accurate projections, the role of the media and other financial commentators is not devoid of risk to the central bank ’ s credibility particularly, in challenging economic times. it is therefore, important for central banks to ensure that where projections on the future path of key macroeconomic variables are provided, these have to be set out in conditional forms and linked to incoming information with an assessment of the balance of risks. mr. chairman, turning to the role of the legislature, it is important to note that legislative oversight of monetary policy has a long history in many countries. in this respect, the usa provides a good case in point of a country with strong legislative oversight over the central bank ’