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Central Bank Transparency and Financial Market: Evidence for the Brazilian Case

Author

Listed:
  • Helder Ferreira de Mendonça

    (Universidade Federal Fluminense)

  • José Simão Filho

    (Universidade Federal de Juiz de Fora)

Abstract

The main objective of this paper is an empirical analysis concerning the effects caused by Central Bank of Brazil transparency on the Brazilian financial market. Furthermore, a brief review of the literature regarding central bank transparency is presented. The effects of the different dimensions of the monetary authority’s transparency on yield interest are examined. Moreover, the consequences regarding changes in the country risk are considered in this study. The findings denote that the Central Bank of Brazil transparency works as a guide for the future interest rate market and that the different dimensions of transparency contribute to a better market efficiency.

Suggested Citation

  • Helder Ferreira de Mendonça & José Simão Filho, 2011. "Central Bank Transparency and Financial Market: Evidence for the Brazilian Case," Brazilian Review of Finance, Brazilian Society of Finance, vol. 9(1), pages 51-67.
    • Handle: RePEc:brf:journl:v:9:y:2011:i:1:p:51-67
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    References listed on IDEAS

    as
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    2. Eijffinger, S.C.W. & Hoeberichts, M.M. & Schaling, E., 1998. "A Theory of Central Bank Accountability," Other publications TiSEM 5741a56f-3a69-41f4-b9fb-4, Tilburg University, School of Economics and Management.
    3. Shin, Hyun Song & Morris, Stephen, 2000. "Welfare effects of public information," Discussion Paper Series 1: Economic Studies 2000,07, Deutsche Bundesbank.
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    6. Courtenay, Roger & Clare, Andrew, 2001. "What can we learn about monetary policy transparency from financial market data?," Discussion Paper Series 1: Economic Studies 2001,06, Deutsche Bundesbank.
    7. Eijffinger, Sylvester C.W. & Geraats, Petra M., 2006. "How transparent are central banks?," European Journal of Political Economy, Elsevier, vol. 22(1), pages 1-21, March.
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    More about this item

    Keywords

    transparency; accountability; inflation targeting; yield interest;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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