What is the quiet period?

14 April 2016 (updated on 29 January 2019)

Members of the Governing Council – which includes the six members of the Executive Board – and their alternates observe a so-called quiet period before key meetings. This means they avoid making comments that could influence expectations about monetary policy decisions in the seven days before a scheduled meeting on this issue. Consequently, their interactions with the media and market participants (e.g. interviews or conference speeches) are restricted in the run-up to such meetings.

Why does the ECB observe a quiet period? Financial markets are extremely sensitive to what a central bank communicates ahead of its policy meetings. So many central banks use some form of quiet period to help prevent excessive market volatility or unnecessary speculation ahead of scheduled meetings that could lead to interest rate or other monetary policy decisions. (Until 2014 the ECB called the quiet period “purdah”, but changed the name due to its outdated gender connotations.)

Still, transparency remains crucial: the ECB has a duty to explain the rationale behind its policies to the public and markets. And it is equally important for policymakers to understand financial markets – these are the channels through which monetary policy works and ultimately has an impact on companies and households. The quiet period is part of a set of guiding principles on external communication which the Governing Council and the Supervisory Board members have endorsed. These guiding principles help them to conduct this key part of their work while maintaining the integrity and credibility of the ECB.

Update: This explainer was updated on 29 January 2019 to provide more details on the topic.