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16/02/2018

The Governor of the Central Bank of Montenegro, Mr Radoje Žugić, takes part in the international conference entitled "Conference on Central Bank Communication and Transparency”, which is being held today in Amsterdam, organised by the De Nederlandsche Bank and the National Bank of Belgium.

The Conference was opened by the President of De Nederlandsche Bank, Mr. Klaas Knot, and it gathers the governors and other representatives of the central banks of the Belgian/Dutch Constituency in the International Monetary Fund, high officials of the IMF and the European Central Bank, as well as professors from the Cambridge University. The participants take part in the discussions on central bank transparency, which has become one of the key challenges of monetary policy, and its influence on perceiving public expectations and response of the financial markets, and thereby its impact on financial stability.

In his speech, the Governor Žugić emphasised that it is necessary for the central banks to abandon the principle of closed institutions and begin with a trend of increase of transparency of their activity and improve the communication with the stakeholders. Increase in central bank transparency, according to the Governor Žugić, “may increase the credibility of the institution and, by imposing the responsibility to monetary policy creators, may increase the possibility of maintaining consistent monetary policy”. However, it should be born in mind that excessive level of central bank transparency could jeopardise the level of financial stability, thus the maintenance of its optimum level should be taken into consideration.

Members of the Belgian/Dutch Constituency in the IMF, of which Montenegro is a member as well, concluded today that the transparency, which simplifies the communication and enables the public to understand better monetary policy activities and its impact on economic trends, should be encouraged. On the other hand, due to the possible risk to financial stability, a high level of caution is recommended in increasing transparency, particularly in the supervision area, which must keep its distance from clients.