Spillovers from foreign countries are not confined only to conventional monetary policies, nor is the U.S. the sole source of transmission. There also is evidence that the unconventional monetary policies of the ECB and the BOJ have spilled over onto the U.S. yield curve and broader financial conditions.7 This is interesting because all three monetary areas share the characteristics of flexible currencies and capital mobility. I will now conclude with a few related comments from the U.S. perspective. The Fed’s statutory mandate, like that of other central banks, is domestic. The Federal Reserve Act states that the Fed should “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates”. Within this mandate, there are good reasons to consider the international effects of monetary and regulatory policies. The U.S. economy and the economies of the rest of the world have important feedback effects on each other, and adverse international spillovers can harm U.S. prosperity. Like other central banks, the Federal Reserve can help promote global prosperity and stability, by promoting growth and stability at home. The FOMC has taken a number of steps in recent years to increase transparency and improve communications, to effectively convey policy intentions to market participants and policymakers. The Fed has also made considerable progress in strengthening the safety and soundness of the U.S. financial system, through improved regulation and supervision of banks and a broader group of systemically important institutions.
Before I conclude, let me briefly turn to the issue of accountability, which – as I said in my introduction – is essential to secure and reaffirm trust in the central bank. For the ECB, accountability to the people of Europe is not only a matter of good accountability practices. It is important for the central bank of a currency union to reach out to the whole euro area, to people in all parts of Europe and to spread trust in our currency, our institution and our policies. As I mentioned, the ECB is accountable to the people of the European Union and – as that Union is a representative democracy – to the European Parliament, which is the only European institution elected by popular vote. Our President regularly visits Parliament to report on and explain the ECB’s policies. The Governors of the national central banks in the Eurosystem have similar hearings before their national parliaments. In addition, we have a continuous dialogue with all relevant institutions involved in the European political process, such as the European Commission, and we have regular exchanges with the finance ministries of the euro area Member States. We also regularly report on and publish our monetary policy decisions. This panel today is one such occasion. Especially in times of crisis, when policies become less conventional and more complex, it is all the more important to carefully explain our decisions.