Outlook: Central bankers

SO WAS it worth waiting for? Yesterday saw publication of the European Central Bank's first monthly bulletin, a 92-page tome which will, according to the ECB, become one of its "most important means of written communication".

In theory, therefore, the bulletin ought to carry at least as much clout as the Bank of England's quarterly inflation report, essential reading for anyone active in the UK markets. In practice, the ECB bulletin is nothing of the kind. Yesterday's issue was a combination of public relations puffery and largely historic economic analysis. As a guide to either the ECB's view on recent economic developments or the likely level of future European interest rates, it was little short of useless.

This shouldn't come as much of a surprise, given the opposition of Wim Duisenberg, ECB president, to improving the transparency of European monetary policy. Mr Duisenberg has rejected calls for the ECB to follow the example of the US Fed and the Bank of England and publish the minutes of its meetings.

He also seems to have eschewed the established practice of using public speeches to signal changes in interest rate policy. Just days before December's co-ordinated cuts in European interest rates, for example, Mr Duisenberg was intimating to all and sundry that there was no immediate need for interest rates to fall.

As a result, financial markets now take everything the ECB president says with a large pinch of salt, including the assertion in yesterday's monthly bulletin that European interest rates are now at about the right levels.

One reason why Mr Duisenberg has chosen to shroud the ECB's decision- making process in secrecy is that this is the way things were always done at the German Bundesbank, a model independent central bank with an "inflation-busting" reputation superior even to that of the US Fed.

Certainly you cannot quarrel with the Bundesbank's record, so who are we to challenge its methods? Times change, however, and what may once have been appropriate for Germany hardly looks like doing the trick for Europe as a whole.

The Bundesbank could get away with not talking to the market for one reason, and one reason alone - its impressive track record. Bundesbank officials had a long history of keeping inflation under control and firmly resisting political pressure. The same is unlikely to be true of the ECB.

The short history of the ECB to date has been marred by political fudge, most visibly over Mr Duisenberg's own appointment as its president. If the ECB is ever to enjoy the same reputation as the Bundesbank, and if Mr Duisenberg is going to be able to soothe troubled markets as effectively as that doyen of central bankers, Alan Greenspan, transparency and communication have to be improved.