Communication as a Monetary Policy Tool for Central Banks

Gone are the days when monetary policy was a largely secretive affair. The ECB President’s monthly press conference following the meeting of the bank’s Governing Council regularly makes the evening news, while the central banks’ announcements of their latest interest rates are awaited with bated breath and later scrutinised with keen interest. Even those with little interest in the central banking system are made aware of the banks’ announcements by the press – even the smallest nuances can have a considerable impact on the financial markets and, by extension, their savings.

How the central banks communicate with the public is now an important element of monetary policy and has even become a policy instrument in itself. One particular challenge the central banks face when communicating with the public are financial crises. During periods of dramatically higher uncertainty and all-round shocks to consumer confidence, it is important that central banks send a clear and unambiguous message. But, in times of crisis, is slick PR all there is to monetary policy?

We would like to thank Deutsche Bank Privat- und Geschäftskunden AG, the Baden-Württembergische Bank, Commerzbank AG, Sparkasse Rhein-Neckar-Nord, the VR Bank Rhein-Neckar eG as well as Volksbank Sandhofen eG for sponsoring this event.