Bank of England media coverage is an “effective” additional channel for accountability, study shows

Analysis indicates a strong connection between media reporting on the Bank of England and both parliamentary supervision of the organization and the Bank’s own efforts to provide accounts.

Media articles are also more likely to be about the Bank’s policy decisions, especially during times of economic turbulence, according to the study.-

Evidence of “enhanced accountability” was discovered by researchers, who found a correlation between coverage levels and both parliamentary hearings and the Bank’s own speeches on account-giving.

Dr. Christel Koop from King’s College London and Dr. Michele Scotto di Vettimo from the University of Exeter conducted the study, which was published in the Governance journal.

The researchers discovered that the number of articles about the Bank increased during times of significant changes in bank rates, the announcement of new liquidity injections, UK bank bailouts, and higher levels of unemployment.

During the study, the researchers analyzed 13,986 articles from The Times, The Guardian, and the Daily Mail that were published between May 1997 and the end of 2020 and focused on the Bank of England. They compared this information to data on various economic indicators and policy decisions.

In addition, the researchers utilized parliamentary hearings featuring bank officials and speeches given by individual central bankers to evaluate whether media coverage amplifies both formal account-holding and voluntary account-giving by the Bank, which they refer to as “enhanced accountability.”

Dr. Koop stated, “The Bank’s media coverage can be attributed to its policy decisions, particularly when those decisions are in response to economic volatility. However, coverage is not as strongly connected to the Bank’s success in achieving policy outcomes, but rather it is linked to both fluctuations in currency rates and levels of unemployment.”

Dr. Koop also noted, “Both the frequency of parliamentary hearings and central bank speeches were significantly and positively correlated with media coverage volume. This indicates that media outlets not only perform their watchdog function by reporting on the Bank’s decisions and policy outcomes to some extent, but also strengthen formal account-holding in parliament and voluntary account-giving by the Bank.”

Dr. Scotto di Vettimo added, “In evaluating the significance of various factors in media coverage of the Bank, policy decisions and enhanced accountability had the greatest impact on coverage volume. Specifically, although infrequent, decisions to bail out UK banks had the most significant influence on coverage volume, followed by the announcement of new liquidity injections. Speeches and hearings had a similar impact on coverage volume. The least influential predictors were changes in the bank rate, the pound-dollar exchange rate, and the unemployment level.”

Dr. Koop and Dr. Scotto di Vettimo emphasized that media accountability for the Bank of England functions reasonably well. Coverage levels can be linked to significant decisions and, to some extent, policy outcomes. The researchers also highlighted the importance of reinforced accountability, as their findings indicate that it plays a crucial role in the media’s accountability landscape. They noted that this is promising in terms of collaboration between different forums and dimensions, which may enhance the accountability expectations of non-majoritarian institutions. These expectations can then contribute to the ultimate goal of making careful and accurate decisions.