Finding themselves at the zero lower bound, major central banks have resorted to unconventional monetary policy. An implicit part of this policy has been a tendency to surprise the markets. While such a tendency is time inconsistent, are there special circumstances in the zero lower bound that could make the tendency useful? To shed light on this question, this paper examines the impact on asset prices of policy surprises by the Fed, the ECB and Bank of Japan before and after March 2009.

Eli Remolona is Chief Representative for Asia and the Pacific of the Bank for International Settlements (BIS). He also serves as the Secretary of the Asian Consultative Council, which consists of the governors of the 12 leading central banks in the region. He is also Associate Editor of the International Journal of Central Banking. Until 2008, he was Head of Economics for Asia and the Pacific of the BIS. Eli joined the BIS in 1999 and for six years served as Head of Financial Markets in Basel and Editor of the BIS Quarterly Review. Before that, he was Research Officer of the Federal Reserve Bank of New York, where he worked for 14 years. He has a PhD in economics from Stanford University.