02268cas a2200241 a 4500 AALejournalIMF002236 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451875607 1018-5941 BD-DhAAL BD-DhAAL Ross, Kevin. Market Predictability of ECB Policy Decisions : A Comparative Examination / Kevin Ross. Washington, D.C. : International Monetary Fund, 2002. 1 online resource (26 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Many surveys of the ECB's monetary framework emphasize the inability of financial markets to correctly predict monetary policy decisions. At the same time, these surveys of financial market participants have given relatively high marks to the United States Federal Reserve and the Bank of England on their ability to be understood by financial markets. Against this background, this paper examines the ability of financial markets to correctly anticipate these three central bank policy decisions over the first 3 1\2 years of the ECB. The paper relies on calculations that market participants employ in anticipating policy changes and on term structure regressions that provide ex post evidence of market surprises. While the results suggest that all three central banks are broadly predictable, markets have had difficulty anticipating large changes and cuts in ECB policy interest rates. These surprises may be tied to the large number of policy meetings, particular characteristics of the EONIA money market, and the unique circumstances of the ECB. An added factor may be the absence of a consistent policy on communicating the current stance-if any-of the ECB's policy bias on the future direction of interest rates. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2002/233 Full text available on IMF http://elibrary.imf.org/view/journals/001/2002/233/001.2002.issue-233-en.xml IMF e-Library