Engaging in social media is certainly not an easy task for the world's central banks. Even more challenging it is for them to build, and crucially maintain, a successful presence in that online environment they neither own nor control. A central bank is a control freak by definition, and the lack of control has for years been a key reason for central banks' unease about social media.
Against this background, I was excited to have been invited as a speaker at last week’s Central Banking training seminar on "Communications and External Relations for Central Banks" in Windsor, United Kingdom. The seminar was all about central bank transparency and communication issues and the challenges central banks face nowadays in embarking on the strategy of openness and proactive communications with the public. My talk aimed to interact with the participants about ways of overcoming some of the challenges that central banks are facing in dealing with social media.
Below I quote an excerpt from my 2-hour long workshop with the participants from central banks in Europe, Asia, Africa, and both North and Latin Americas:
The key to understanding social media as an element of any central
bank's communication strategy is to consider the networks such as Twitter, Facebook or Instagram a communication tool, not a transparency tool.
Since transparency is a key precondition to successful communication, it is no surprise that very open central banks are predominantly exactly those which have begun routinely using social media as one of their communication tools.
If a central bank is not much transparent about policy, it has pretty much nothing to communicate, and as such it makes no sense for such a central bank to open a Twitter or Facebook account. In that regard, social media activity is merely a reflection of transparency.
Central bank websites have been transforming into digital news and information hubs, and the content they provide via those website hubs will over time naturally be reflected in whatever social and other media they operate at a given time. It is very clear that the words and images used to describe what central banks are doing will need to wary across media, and be tailored to the needs of each individual audience of a given medium.
As for transparency, I follow with interest the transparency-enhancing web activities of a growing number of central banks. Here I am specifically talking a live webcast of a press conference, of an analyst meeting, of a speech by the governor or another policymaker. These broadcasts, provided and paid for by the central bank itself, are non-discriminatory (available not only to subscribers of, say, Reuters or Bloomberg) and give the entire public an opportunity to follow policymakers' comments word by word. This is where in my view lies the next digital frontier of central bank transparency.