Working Papers

Does the RBA Still Feed the Media Chooks?

Speculation about RBA media backgrounding in relation to future interest rate decisions is back again.  Even if no such backgrounding has taken place, the perception that this still occurs is very damaging, not only for the integrity of financial markets, but also for the supposed beneficiaries of the backgrounding.  It is well understood that politicians engage in selective leaks in order to control journalists.  There is nothing more damaging to the credibility of a press gallery journalist than to be seen as the mouthpiece for a politician.  The relationship between the RBA and journalists should not be viewed any differently.

The RBA could put a stop to the speculation by denying that the practice takes place or at least foreswearing its use in future.  Not only would this benefit the integrity of financial markets, it would also give us more confidence that the rather generous treatment the RBA receives from many in the media was actually deserved.

posted on 07 October 2009 by skirchner in Economics, Financial Markets, Media, Monetary Policy

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This is just terrible. I agree that the RBA should either explicitly deny the allegation or commit to it never happening again. And why Gittins of all people - I can’t stand him!

Posted by .(JavaScript must be enabled to view this email address)  on  10/07  at  11:13 PM

Then don’t read him.  Problem solved!

Posted by skirchner  on  10/08  at  12:52 PM

It’s a bit hard to avoid him if he gets privileged access to information.

Posted by .(JavaScript must be enabled to view this email address)  on  10/08  at  01:07 PM

Only if you’re in the business of placing bets on rate announcements.

Even then, there is strong case for market economists not to play along this nonsense.  It would put an end to the practice very quickly.

Posted by skirchner  on  10/08  at  08:14 PM

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