The Value of Private Meetings with Central Bankers

Category: Finance Brown Bag Seminar
When: 02 November 2022
, 14:00
 - 15:00
Where: online
Speaker: Sebastian Schreiber (Goethe University)

Title: The Value of Private Meetings with Central Bankers

Abstract: We investigate the ECB’s main informal communication channel, namely private bilateral meetings of ECB Executive Board members with market participants. These meetings are frequent with some institutional investors meeting ECB board members almost every quarter, decreased in number after meeting calendars had to be disclosed publicly and are highly susceptible to a nationality bias. Using trade-level data from Germany, we find that banks build up long positions in equites and interest rate futures after meeting ECB board members and before the ECB announces expansionary monetary policy decisions. In line with this, we find that banks report higher trading profits in quarters where they met ECB board members. While our results suggest that the ECB’s informal communication indeed conveys meaningful information to the market, they raise concerns about neutrality of the ECB’s communication policy.