FRANKFURT (Reuters) - The European Central Bank is looking into spacing out its policy meetings to give itself more time to assess economic developments before deciding on its policy stance, several sources told Reuters.
ECB President Mario Draghi has also suggested that holding policy-setting meetings every month may create unnecessary short-term tensions in the markets.
The 24-member Governing Council currently meets twice a month, once to set monetary policy, after which Draghi holds a news conference, and once to discuss issues related to the bank’s other tasks and responsibilities.
One option is to lengthen the time frame between policy meetings to six weeks, which would not upset the current bi-weekly meeting cycle and would allow the Council more room for discussion of other matters, for example related to its new banking supervision responsibilities.
From November, the new Single Supervisory Mechanism, which was created under the auspices of the ECB, will start supervising the euro zone’s largest banks and the ECB’s Governing Council has the last say on its decisions.
The ECB declined to comment.
The Bundesbank may be ready to back a move towards less frequent policy meetings. “We could go along with that,” a source close to the German central bank said.
The subject could be discussed at the next ECB Governing Council meeting on Wednesday, but a decision is unlikely then.
Draghi first raised the idea of less frequent policy meetings in April. Speaking in a personal capacity he said that “with the need to avoid triggering short-term market noise, we should reflect on the frequency of our monetary policy meetings as well”.
“It’s pretty clear that our frequency of meetings leads the markets and the public to expect action,” he said. “Not all major central banks have monthly meetings.”
The U.S. Federal Reserve, for example, has eight policy meetings per year, one about every six weeks, but it can also hold unscheduled meetings if necessary. Four times a year, these meetings are followed by a news conference.
The Fed publishes a full set of minutes for each policy meeting after three weeks.
The ECB is also thinking about publishing written accounts of its policy meetings sooner than the current 30-year time frame to add more transparency to its decision-making process. Initial pilots for this project are already under way.
Reporting by Andreas Framke, Paul Carrel and Eva Taylor; Editing by Hugh Lawson