I note that even publicly traded companies that wrestle with the relatively easy task of providing forward guidance on revenue and earnings find that exercise especially vexing; most won’t venture beyond forecasting the upcoming quarter – and that is after they already have a month’s worth of the quarter’s data in hand! In this morning’s Financial Times, Charles Goodhart, professor emeritus at the London School of Economics and former member of the Bank of England’s Monetary Policy Committee, claims to have examined the record of three central banks that have most prominently engaged in the practice of providing multiyear rate forecasts. He concludes: “The record for central banks in New Zealand, Sweden and Norway is not encouraging. In the short run, over the next three months and to a lesser extent over the subsequent quarter, these central banks do have additional (inside) information about their own future actions. Beyond this, however, the extra informational content of those central bank forecasts is zero. Moreover, the market knows that central bankers have no superhuman forecasting ability and will tend to view the supposed longerterm forecasts as a version of jawboning, attempts to persuade the market to change its mind for immediate policy purposes. Again, there is little empirical evidence that the market responds to such jawboning, and why should it when the central bank is as ignorant of the longer-term future as they are?”6 I don’t in any way consider my learned colleagues on the FOMC to be ignorant.
Miroslav Singer: Regulatory earthquake Welcoming remarks by Mr Miroslav Singer, Governor of the Czech National Bank, at the Basel Consultative Group Workshop on the impacts of Basel III on emerging market and smaller economies, Czech National Bank, Prague, 26 August 2013. *  *  *  Dear participants of the Basel Consultative Group Workshop, Ladies and gentlemen, Let me warmly welcome you to the Czech National Bank, which is proud to host this workshop on the impacts of Basel III on emerging market and smaller economies. I am very glad that my institution is involved in this workstream because I believe it is important for emerging economies not to be merely passive recipients of the regulatory “earthquake” in the banking industry which is spreading from advanced countries. Emerging economies should not and cannot blindly adopt new regulatory measures, as their financial markets have their own specific features. What is a priority for regulators in the most developed economies may not be a priority for regulators in emerging economies. On the other hand, the proposed measures within the Basel III framework may have unintended consequences for these countries, so it is worthwhile either to be prepared for them or to try to mitigate them if they are negative. Let me start by underlining what I consider to be the two fundamental difficulties of the current regulatory push.