Market intelligence at central banks

Insights from a Markets Committee Workshop chaired by Andréa M. Maechler (Swiss National Bank)

Market Intelligence  (MI) is a key element in central bank operations and policy analysis. It is an important tool to inform monetary policy decisions, monetary policy implementation, reserves management, or financial stability risk assessments. A workshop of the Markets Committee reviewed recent developments in this area. The workshop was chaired by Andréa M. Maechler (SNB) and allowed central bank participants to exchange perspectives on their respective MI frameworks, practices, and challenges.

Traditional MI remains central, and critical, for MI frameworks. Traditional MI consists of direct interactions and dialogue with market participants, surveys and expert judgement to corroborate and synthesize insights. And as the market environment has grown more complex, central banks have expanded their MI frameworks to include new market segments and new participants.  MI has historically also relied on both qualitative outreach and data analysis. In addition, central banks are increasingly leveraging advanced technologies, innovative quantitative methods, and richer, more granular, and higher frequency data to inform their assessments. In light of the pandemic, many MI teams have also incorporated a hybrid format into their outreach to market participants and note associated benefits and drawbacks.

The note further elaborates on the main insights of the workshop.