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The global financial crisis of 2007-09 has illustrated the importance of including funding liquidity feedbacks in any model of systemic risk. This paper illustrates how we have incorporated such channels into a risk assessment model for systemic institutions (RAMSI), and it outlines the Bank of England's plans to use RAMSI to sharpen its assessment of institution-specific and systemwide All authors are with the Bank of England except Prasanna Gai, who is with the Australian National University, and Nada Mora, who is with the Federal Reserve Bank of Kansas City. The RAMSI project represents a major investment of Bank of England resources, and we are grateful to many people both inside and outside the Bank of England for their contributions. In particular, the National Bank of Austria has been very generous in providing guidance and significant analytical contributions. The analysis in this paper has benefited from encouragement and contributions from Viral Acharya, Niki

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We examine how inflation and the costs associated with disinflation episodes are related to monetary policy transparency. We develop a simple model that demonstrates how transparency may result in lower inflation. Our empirical results show that in general, transparency may be associated with lower inflation across a broad range of countries and frameworks. In addition, the output costs of disinflation, as measured by the sacrifice ratio, are negatively related to the degree of monetary policy transparency. The capacity of the central bank to limit the monetary financing of government deficits also has an inflation-reducing effect. Considering transparency as a possible determinant of cross-country differences in the costs of disinflation represents a new contribution to the literature, especially given the failure of previous empirical research to find a robust negative relationship between other aspects of the central bank's institutional design and the sacrifice ratio.

The global financial crisis of 2007-09 has illustrated the importance of including funding liquidity feedbacks in any model of systemic risk. This paper illustrates how we have incorporated such channels into a risk assessment model for systemic institutions (RAMSI), and it outlines the Bank of England's plans to use RAMSI to sharpen its assessment of institution-specific and systemwide All authors are with the Bank of England except Prasanna Gai, who is with the Australian National University, and Nada Mora, who is with the Federal Reserve Bank of Kansas City. The RAMSI project represents a major investment of Bank of England resources, and we are grateful to many people both inside and outside the Bank of England for their contributions. In particular, the National Bank of Austria has been very generous in providing guidance and significant analytical contributions. The analysis in this paper has benefited from encouragement and contributions from Viral Acharya, Niki

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We examine the relationship between central bank transparency and the costs of disinflation. We provide a model where disinflation efforts imply a higher sacrifice ratio when the public is not fully convinced about the central bank's resolve to reduce inflation and show that information dissemination by the central bank can remedy this problem. To assess the empirical implications we estimate sacrifice ratios based on individual estimates of Phillips curves in 21 OECD economies. Using transparency indices pertaining to both the detail with which central banks publish forecasts and the means by which policy decisions are explained, we find that a higher degree of central bank transparency is associated with lower sacrifice ratios. This result is robust to alternative estimation methods and periods considered.

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