The ECB minutes’ leak and the historian’s “black box”

In an article on the bailout of the Cyprus Popular Bank, Landon Thomas Jr for the New York Times describes internal disputes within the European Central Bank on the basis of leaked ECB minutes.

Like the issue of the “loss” of the archives of former secretary general of the Élysée palace Claude Guéant earlier this year, the disclosure of such documents that are meant to be confidential raises some questions all linked, directly or indirectly, to the “black box” of an historian’s work. Set aside a classic “who was interested in leaking them?” three issues stand out: on the practice of releasing central banks’ minutes, on the rationale of the ECB’s archival policy, and on the content of the minutes reviewed.

The New York Times’ article observes that the ECB is rather lonely in its practice of not releasing its minutes, contrary to what the Bank of England and the US Federal Reserve do, for instance. One recent such example was the Fed’s release, earlier this year, of the 2008 meetings of the Federal Open Market Committee. This release shed light on the onset of the global financial crisis (see for instance an interesting blog by Harold James on this issue).

But the ECB’s practice is also following the policy of many (not to say all) other continental European central banks, including the Banque de France, the Banca d’Italia, and obviously the Bundesbank, along which model the ECB was largely built. In addition, if minutes of Bank of England and US Fed meetings are indeed released, most of their archival material – backgrounds notes, correspondence, minutes of other meetings, etc. – remain closed for 20 years (BoE) or 30 years (US Fed), provided of course that the transfer and cataloguing of documents can be performed in a timely fashion. Such documents are often key to understand a central bank’s decision – its origins and rationale – sometimes even more than the deliberations of a governing council alone. A final note: most government documents are closed for 20 to 30 years in most cases – depending on archival practice –, so the Bank of England/Fed policy regarding their minutes is, in strict terms of archival practice, the exception rather than the rule.

This episode also encapsulates the advantages and drawbacks of the ECB’s archival policy. Had the ECB released the minutes earlier, then this may have defused the dispute earlier too – or, conversely, increased the panic on financial markets. But the fact that the minutes have now been leaked also gives credence to the ECB’s central justification in not disclosing such documents, namely, that ECB minutes could reveal national strains that could undermine the ECB’s position. If Jens Weidmann’s stance, as reported by the New York Times, is not terribly surprising, it is now well documented, and can nurture further speculation, in all senses of the term. By contrast, the disclosure after 30 years of the Committee of Governors’ minutes is less liable to make waves.

Will this episode prompt the ECB to review its archival policy? Earlier this year, the Financial Times reported discussions on the issue in Frankfurt. In a statement on 17 October 2014, the ECB did not deny the content of the minutes (even less their existence, of course). It merely re-stated its role and policy in the case under scrutiny, as well as warned against possible interpretation of the leaks (especially with a view to the ECB’s future role in banking supervision).

The aspect of the leak that most piqued my curiosity, however, is that “the New York Times has reviewed governing council minutes dating from May 2012 to January 2013.” There must have been many other insights that could have been gained from a reading of these minutes. To take but the most famous example, Mario Draghi’s “Whatever It Takes” speech, one of the most important episodes of the Eurozone crisis, happened within that timeframe, on 26 July 2012. What were the reactions within the ECB? And most importantly: this declaration was in all likelihood something planned in advance, but how? What internal opposition did it face, if any? Answering these questions would require a full access to all sorts of ECB documents, but ECB minutes might already give some interesting indications.


(Picture: (c) E. Mourlon-Druol)

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