The Architecture of Central Bank Transparency: Accounting Information and Financial Stability as Structural Pillars of Monetary Policy Transparency

Abstract

This article offers a structural reappraisal of central bank Monetary Policy Transparency (MPT) by explicitly incorporating two dimensions that have long remained peripheral in the literature: Accounting Information Transparency (AIT) and Financial Stability Transparency (FST). Building on a rigorous theoretical foundation, we develop two original transparency dimensions centered on AIT and FST, designed to extend a widely recognized monetary policy transparency index developed in the existing literature. This extension aims to capture, in an integrated manner, the institutional and macroprudential foundations that underpin the credibility, coherence, and effectiveness of modern monetary policy. The empirical analysis relies on a balanced panel of 25 countries over the period 2000–2019 and employs both Ordinary Least Squares (OLS) and the Generalized Method of Moments (GMM) to address potential endogeneity concerns and ensure the structural robustness of the estimations. The results provide strong evidence that both AIT and FST exert a positive, statistically significant, and economically meaningful effect on MPT. These findings substantially enrich the analytical framework of central bank transparency by demonstrating that high-quality financial reporting and transparent macroprudential communication constitute fundamental pillars of central banks’ credibility capital in an increasingly complex and globalized financial environment.