ECB to Provide Record of January 22 Meeting Tomorrow

Tomorrow is an important day for the ECB.   Yes, it does appear a Greek compromise is getting closer as the brink draws nearer.  Yes, the ECB is preparing to launch its new and more aggressive asset purchase program, just as the eurozone real sector data and financial data are improving.  

What makes tomorrow important is that for the first time the ECB will report an account of its meeting.  Other central banks release what they call minutes with relatively short lag times.  They are not really minutes; rather more of a general record of the discussions at the meetings. 

This has been in the works for more than a year.  It is part of the evolution of the ECB.  Recall that starting this year, with Lithuania joining monetary union, the ECB has gone to less frequent meetings and a rotating voting scheme.  Both measures are somewhat similar to the Federal Reserve.  

For its part, the Federal Reserve has introduced regular press conferences.  While the ECB has a press conference after each meeting, the Fed's press conferences are once a quarter.  We are under the impression that the Federal Reserve may be considering press conferences more often.  This could increase the Fed's transparency and prevent the gaming of the meetings (important changes take place at meetings with scheduled press conferences).   

Yellen suggested a press conference could be called at the conclusion of any meeting.  However, this is a bit disingenuous.  For example, there is no press conference scheduled after the April FOMC meeting.  If one is hurriedly called, it would tip off investors that something was up. 

The ECB has not given much insight into the form or content of the record that it will publish tomorrow (1:30 pm CET/5:30 am ET).  We would expect the usual components--a discussion of the real economy, the financial sector, prices and risks.  The identity of individuals will most likely to be omitted.   The January 22 ECB meeting was important, and it may use the record of the meeting to provide more color about the decision.  There could be some accounting for those that disagreed with the majority decision. 

An important point for investors to keep in mind is that the record of the meetings is partly about transparency, but it must ultimately be seen as another communication channel.   They are not an objective, comprehensive, detailed account of what transpired.  What is included must be assumed to be purposeful.