Tone of PBoC moves markets, says Bank of Finland paper


The tone of speeches from the People’s Bank of China summarising committee meetings has a significant influence on stock prices, says a paper published by the Bank of Finland.

In Does People’s Bank of China communication matter?, Hamza Bennani uses a financial dictionary to identify negative words within speeches, then compute the tone of the speech by assessing the prevalence of negative words. He then uses a “high-frequency methodology to estimate the effect of tone on stock prices”.


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