Monday, April 27, 2009

Out of the Shadows

Ben Bernanke, Chairman of the Federal Reserve System, is speaking out and it is making news!

Bernanke is only fulfilling Obama’s promise about transparency — talking to the American public about the financial crisis, as indeed he should be doing.

But, according to an article last week by Jon Hilsenrath, chief economic correspondent for The Wall Street Journal, Bernanke entered the office wanting to make the central bank less personality-driven than it was under his predecessors, Alan Greenspan and Paul Volcker. His decision to step forward was only due to the current economic quagmire and the need to establish a dialogue with the American people.

According to Hilsenrath, Greenspan during his tenure as Chairman of the Fed gave only one on-the-record TV interview, almost never took questions after speeches and “delighted in his ability to obfuscate.” Bernanke, on the other hand, “is taking his campaign for openness in directions he hadn't anticipated.”

The reality is that, recession or not, the president of the Federal Reserve ought to be addressing the American public on a regular basis (e.g., monthly or bi-monthly). The visibility factor should not be an option, but a requirement.

The only caveat — since statements by the Federal Reserve chairman have stock market impact — is sensitivity to current developments (e.g., quarterly reports or a looming crisis). Ideally, the timing of his remarks should be as market-neutral as possible (although that may not always be possible). On the heels of the economic travails of the past year, communications has hopefully risen in stature at The Federal Reserve so that it will become a permanent policy pillar.

Technorati Tags: Makovsky + Company, Ben Bernanke, Federal Reserve System, Obama, transparency, financial crisis, Jon Hilsenrath, The Wall Street Journal,Alan Greenspan,Paul Volcker,recession,American public, business, communications, public relations


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