Puppies, reggae songs and cartoons: central banks are trying it all to explain themselves
New Zealand's central bank chief says the aim is to speak in plain English, as opposed to language ‘only half a dozen people actually understand’
New York — Central banks face an inherent challenge in a world where nuance is out of fashion and policy conversations happen in 280 characters or less.
What they do ranges from the mildly specialist to the mind-bendingly complex, and it’s risky for central bankers if the public has no idea what they’re up to — or why. Policies to stabilise inflation work best when people believe in them, because they depend on expectations of where prices will go. And a popular backlash against higher interest rates can bring political heat.
The fix? Puppies. And reggae songs, cartoons, dancing fishermen. The Fed and its global brethren, from the Bank of Jamaica to cod-fixated Norway, are turning to social media and finding new ways to explain themselves to even the most lay observers. Some of the efforts may fall on deaf ears (the European Central Bank has 1,600 followers on Instagram, fewer than its 2,500 staffers), but it’s a good time to try. Several of the world’s biggest monetary authorities are moving toward tighter policy, setting themselves up as obvious scapegoats if economies lose their shine. And as populism sweeps the globe, established institutions — especially those with unelected leaders — need to shore up public faith. “Our challenge is to speak in plain English, as opposed to a high-tech scientific language that only half a dozen people actually understand,” Reserve Bank of New Zealand governor Adrian Orr said at his first press conference last May. Beyond words It’s a widespread problem. The Bank of E...