Central bank communications in a post-truth world…

Not seen an central banker talk about post truth world.

Mr Mugur Isărescu, Governor of the National Bank of Romania. in this speech touches on the topic:

In a world of uncertainty, with incomplete information about the prospects and state of the economy, information about central banks’ strategy is a necessary, although insufficient, condition for the general public and market participants to understand decisions and shape their expectations.

A careful calibration of wording is needed, along with greater efforts to explain the role and limits of central banks in the financial field, in order to secure confidence. All this becomes even more  challenging given the fast-moving, ‘post-truth’ environment plagued by populism. As impatience has filtered in many domains, an erosion of confidence in the independent, accountable public institutions has emerged, as did the risk of exposure to swings in the economy, due to a change in sentiment.

To cope with this, central banks across the globe have boosted their efforts to educate, increase financial literacy, outreach and dissemination capacities, while trying to deal with the growing challenges related to fake news and negative campaigns.

I would like to draw your attention to some recent, new tools – first, an ECB educational product called ‘Visitor Centre…to Go’ that briefs in plain language the institutions’ key messages and knowledge in an easy-to-carry format – a suitcase! Any ECB expert can use this kit during visits to schools or universities. Secondly, an interesting way to counterbalance fake news campaigns is the one used by the central bank of Ukraine – winner of 2019 Central
Banking Publications award for transparency. They created a page on their website as well as infographics, with simple and relevant data, to dismiss fake news about local banks as the sector was struggling with a critical situation.

Therefore, effective central bank communication for the whole spectrum of its policies is an ongoing challenge.

Given the rapid change in perceptions in a ‘post-truth’ environment, with few impartial media and the increase in populism, most central banks across the world, including the National Bank of Romania, may face a possible delay in recovering the public trust to the pre-crisis levels. Even if they spoke more plainly or loudly, using all the modern communication toolkits, the slow bridgingof the trust gap should not crush the contribution of independent central banks to the efforts to  avert crises, achieve economic progress and be an open and responsible institution in the society. And, in the National Bank of Romania’s case, its legacy is an important pillar of Romania’s modernisation.

Hmm…

This is already a huge challenge and likely to become a bigger one in future..

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