While such situations may pose unprecedented communication challenges to central banks and may require different policy responses, central bank communication in these circumstances should aim to restore trust and preserve confidence among financial market participants, and to indicate, if necessary, that the monetary authorities are alert and ready to act promptly and effectively, in line with the statutory objectives and assigned tasks, to preserve price stability and safeguard financial stability.
Let me provide two examples. The first goes back to November 2005 and May 2006. On both occasions, market expectations about the need for, or the size of, future policy adjustments were out of line with those of the ECB. So, on both occasions, we made market participants aware of these misperceptions, through appropriate communication, and thus avoided surprises and market volatility.