One comment often made about the European Central Bank is that it takes good decisions but explains them badly.

Apart from a few permanently hostile critics, most ECB-watchers would find little cause for complaint in the bank's steering of interest rates over the past three years. The bank's communications skills, by contrast, are widely viewed as a weak spot. Before changing interest rates, ECB policymakers have not always sent clear signals to financial markets about their intentions.

Last May the ECB gave the markets a welcome surprise by cutting rates, after indicating for several weeks that it had no such move in mind. But the bank shot itself in the foot by offering a justification, based on distorted money supply data, that flummoxed everybody.

Part of the reason for the "communications gap" may lie in the complexity of the bank's monetary policy strategy. This book by Otmar Issing, the ECB's chief economist, and his three collaborators - all senior ECB researchers - represents an attempt to explain why the ECB adopted its strategy and how it works in practice.

Readers will find no "kiss and tell" secrets. There are no disclosures about the controversy surrounding Wim Duisenberg's appointment as ECB president in 1998. Nothing can be gleaned about what members of the ECB's 18-strong governing council say at its meetings.

Moreover, since the book stops at December 1999, we are none the wiser about what council members thought about the euro's steep fall last year on foreign exchange markets. It will be interesting one day to find out why the ECB judged it necessary in May 2000 for Mr Duisenberg to issue an unscheduled statement assuring the eurozone public that the euro was a solid currency.

That said, the book offers useful insights into the ECB's thinking. Why, for example, did the bank resist a worldwide trend among central banks and insist on giving a prominent role to the monitoring of money supply growth in its official strategy? "It would have been too hasty for a new central bank, mandated to preserve price stability in the euro area, to ignore the special role that money has played in the history of inflation, in Europe and the world," the authors write.

"Money . . . serves as a useful signal of continuity with those central banks (including, but not only, the Bundesbank) which have, in the past, successfully used monetary aggregates as part of their strategies."

Ah, yes, the Bundesbank. As the book reminds us, for every critic who accuses the ECB of taking money supply too seriously, there is a critic in Germany who assails the bank for not taking it seriously enough. The truth is that for the euro to be acceptable in Germany, there always needed to be a Bundesbank-style monetary component to the ECB's strategy. With an outstanding inflation-fighting record, Germany had every right to expect as much.

However, just as the Bundesbank was never as rigidly monetarist as its legend suggests, so the ECB appears to interpret money supply data with considerable flexibility. Its interest rate cut of April 1999 and its latest cut on August 30 were both taken against a background of rising money supply.

What factors prompt the ECB to change interest rates? Tracking money supply is the first pillar of the bank's "two-pillar" strategy; the second involves a broader assessment of the eurozone's inflation outlook.

The book's discussion of the ECB's two interest rate changes in 1999 shows the bank is more forward-looking than its critics allow. It justifies the 0.5 percentage point cut of April 1999 on the grounds that all forecasts suggested inflation would be well within the ECB's 2 per cent target ceiling "in the following two years".

Another point stressed by Issing and his co-authors is the challenge of setting monetary policy for a region lacking a common statistical history. "The set of statistics available for the euro area is more restricted than what is normally available to a central bank of an industrialised country," they observe.

On some topics, the book simply throws up smokescreens. For example, it defends the practice of not publishing council members' votes by arguing that publication would undermine collective accountability. This would supposedly risk turning ECB council meetings into occasions when each member read out a prepared statement, thus transferring the true policy debate to "separate informal gatherings".

Valid or not, this argument fails to answer the question of why, as far is as known, the ECB council has never taken a formal vote on interest rate decisions but agrees all its moves by consensus. To what degree does the search for consensus inhibit speedy decision-making? Is this emphasis on consensus an institutional feature of the ECB or would it be different under a president other than Mr Duisenberg?

The answer to the second question may come sooner than we think if Mr Duisenberg retires next year. But on that little matter, too, Mr Issing and company are as inscrutable as the night.