How do you explain the European Central Bank’s capital key in 140 characters? Or the U.S. Federal Reserve’s dot plot?
Difficult. But International Monetary Fund chief Christine Lagarde wants the world’s policymakers to try.
At a conference in Croatia on Tuesday, Lagarde said convoluted fiscal and monetary policy proposals use terminology “hardly anybody understands” and often lose the public’s attention.
“We are in an era where some political leaders communicate almost exclusively using 140 characters,” Lagarde said, referring to the Twitter limit. “We too in the financial community… need to have in the back of our mind those 140 characters.”
Financial policymakers, and central bankers in particular, can be famously opaque, steering sophisticated investors by the mere dropping of a word. But this is a world far removed from ordinary people.
“Smart communication, funny communication, alternative, not fake communication, around what you are about to do is, in my view, critically important,” she said.
“Because that battle is going to be lost or won depending on how early you prepare and how efficiently you communicate in simple, easy to understand terms, with funny to ready, funny to listen to, media supported tools.”
She argued the lack of clarity risked getting the policy message hijacked, creating a self-defeating cycle.
So how about: Central banks want to stop pouring #money into improving world economy, but low inflation, hungry markets mean they can’t SAD As for the ECB’S capital key, the bank responded on Twitter:
“Ok: each EU national central bank owns part of ECB. How much?=capital key. Based on population and economy @Reuters”