FRANKFURT (Reuters) - As the European Central Bank peels away layer after layer of the secrecy that once shrouded its rate-setting process - including now saying what it sees in the future - it has reasons for caution in not revealing too much.
Shining too much light on ECB governors' voting behaviour could fuel political tensions in their home countries, jeopardising their independence in Frankfurt and maybe even destabilising fragile governments.
The ECB after all is a body that represents a unit - the euro zone - but is made up of central bank representatives from 17 different economies with 17 different needs.
The bank's potentially unlimited firepower in financial markets and its ability to act fast have given it a pivotal role in fighting the euro zone debt crisis.
But this power also makes it a target for politicians to try to influence, a target that could become more exposed the more those politicians learn about what "their" ECB member is up to.
So the current debate about whether the bank should issue minutes as the U.S. Federal Reserve and Bank of England do is not just a matter of transparency.
"To keep the minutes locked up for 30 years as it is done now is certainly too long, but publishing them too soon after the meetings risks exposing the governors to political pressures, which would not be constructive for the central bank's operation," Governing Council Member Ewald Nowotny, an Austrian, told Reuters.
The ECB is unique in its set up. The central bank governors from the different economies that form the euro zone are meant to participate in their personal rather than national capacity, to honour the joint bank's independence.
But dissociating completely from national interests is hard, especially when politicians keep testing the boundaries. Past experience has shown the latter are not wont to have strong opinions.
In 2007, then French President Nicolas Sarkozy tried to push the ECB to cut interest rates by accusing it of helping speculators and hurting business.
In 2011, the bank bought Italian and Spanish government bonds only for Italy's then prime minister, Silvio Berlusconi, to go back on the reform promises he had made to get the ECB to step in, making the bank wary of being taken advantage of.
Some investors are concerned about the impact publishing minutes might have.
"You should avoid giving easy arguments for populist views," said Maxence Mormède, head of fixed income for Germany at Allianz Global Investors, responsible for the management of 27 billion euros ($36.00 billion) in fixed income.
"For us fixed income investors, knowing too much may be as misleading as knowing too little," he said.
Some also argue that it is not necessary.
"We know anyway roughly what the position of the governors is," said Oliver Eichmann, head of euro zone fixed income at Deutsche Bank Asset and Wealth Management, which has 946 billion euros under management. "There is a risk that the ECB's credibility will suffer if it publishes too many details and then has to correct or change its opinion."
But transparency is the way ahead for the ECB. Mario Draghi took over as ECB president in November 2011 and has been more open about policy options than his predecessors.
He recently broke a long-standing tradition of never pre-committing on interest rates by issuing the central bank's first forward guidance, saying rates would remain low for some time.
The move came after the U.S. Federal Reserve shocked global markets by indicating it may end its stimulus sooner than many had expected, pushing up sovereign debt yields and money market rates in Europe, to the dislike of the ECB.
Forward guidance was only the beginning of this new communication strategy.
This month, Draghi revealed that the bank's Governing Council was considering publishing the minutes to give a better account of the reasoning behind its decisions, given the growing complexity of the environment in which the ECB operates.
Executive Board member Joerg Asmussen has even called for the publication of governors' individual voting behaviour.
The Executive Board - the six-man team in Frankfurt who together with the 17 national central bank chiefs form the Governing Council - will present a proposal in the autumn.
But it faces opposition, such as that of Nowotny.
And while orthodox economic literature hails transparency as a key ingredient for a better functioning of markets, for central banks the matter is less clear-cut.
Too much information can take away the element of surprise that keeps markets on their toes.
When the ECB and the Bank of England recently introduced forward guidance, they had to tread a fine line, providing assurance, yet not revealing too much to tie them down and - in case of the ECB - keeping pressure on governments to reform.
Andrew Bosomworth, senior portfolio manager at Pimco, the world's largest bond fund, pointed out that every additional publication may create market volatility - just what the ECB is trying to counter with its forward guidance.
"From a market perspective, more transparency can actually increase volatility," he said. "The more events you provide to the markets, those things can become sources of volatility when they contain information that was not previously known." ($1 = 0.7500 euros)
(Editing by Jeremy Gaunt.)