BOE Sentiment: The Origin of Modern Central Bank Communications

Abstract

Banking history is, as a rule, not the most commonly researched topic, but even a casual investigation reveals that central banking has a long tradition maintaining financial stability, and the Bank of England (BOE) stands as exhibit A to that point. Chartered in 1694, the BOE is one of the oldest central banks on earth, and this established institution has, like many central banks, only gained authority and economic prominence over its reign. This chapter begins by looking into the long history of one of the first central banks in the world, tracing the evolution of an institution—from monetary lightweight to undisputed powerhouse—that helped build an empire. Like with the Fed and the ECB, the BOE’s rise to financial authority has been followed by an equally significant measure of transparency, and it is this thread, as in other chapters, that is examined the most in this one. In its entire history, the BOE has never looked so lively—or been so vocal—a simultaneous development that makes what the central bank has to say more consequential than ever before.