LONDON (Reuters) - The European Central Bank (ECB) said on Wednesday it would stop providing journalists embargoed copies of its speeches, as a storm grew over one of its top policymakers giving hedge funds a head start on market-sensitive information.
On Monday, ECB Executive Board member Benoit Coeure gave a speech to an invitation-only dinner of fund managers, bankers and academics in London, saying the bank would accelerate its bond buying programme to offset an expected summer lull.
When the speech was made public on Tuesday, the comments moved the euro as well as stock and bond markets. The euro had also dropped around the time the speech was originally delivered, and the ECB came under fire about giving a possible trading advantage for those at the dinner, which included top hedge funds like Brevan Howard and banks such as Goldman Sachs and Citi.
The event was not open to media. Some 13 hours after the speech was given, news outlets received a pre-release copy, which was embargoed for release an hour later, when it was also published on the ECB’s website as European markets opened on Tuesday.
The ECB’s decision to clamp down on giving the text of speeches to the media in advance, a practice used at most of the world’s big central banks, therefore came as a surprise.
An ECB spokesman said that the decision was a “tightening up of procedures” after what had happened on Monday although it had been under consideration beforehand.
The ban will not apply to the data the central bank publishes and will not affect its interest rate decisions which are delivered over teleconference, although that is also under review and expected to eventually switch to an automated system.
Although it is getting increasingly difficult to verify the credentials of news outlets in the age of social media, central banks provide journalists with the speeches before they are delivered so that they can be reported simultaneously, lowering the chances of people trading on privileged information.
Reporting by Marc Jones, editing by Louise Ireland and David Gregorio