If people don’t understand, how can they trust you?

“All money is a matter of belief” wrote Adam Smith, the father of the market economy. That belief relies on the trust that our money keeps its value. Sustaining that trust is a key concern for independent central banks, including the European Central Bank (ECB). How do we do it? By doing our job – and explaining what we are doing. 

For a long time, the only people really following central banks were M.E.N., as former Bank of England Chief Economist Andy Haldane called them: markets, economists and news agencies. They were – and often had to be – avid consumers of what central banks did and said, no matter how obscure, technical and riddled with jargon the public announcements were.

But over the years, we have witnessed a revolution. Central banks have figured out that communicating more clearly and beyond their usual niche audience is not just a nice-to-have. It is crucial to foster legitimacy and support for their independence. And it is a policy tool in its own right. These days, “monetary policy is 98% talk and 2% action”, as Ben Bernanke, former Chair of the US Federal Reserve, once put it.

If not just markets, but also consumers and businesses understand what we do and trust us to do our job, this makes our policy more effective. It helps us with what we ultimately seek to do: to guide all our economic behaviour in such a way as to preserve monetary and financial stability for everyone. 

But getting through to the wider public – to workers, savers, pensioners, or young people – is not straightforward. Many pay little attention to central banks, or none at all. Others do not have enough financial and economic knowledge to understand us. That actually stands in the way of our interest rate policy gaining traction on the ground.¹ Research shows that the inflation expectations of consumers “matter just as much, if not more, than those of financial markets for the transmission of monetary policy.”²

So why not talk to people directly? We want to be – and must be – understood and trusted by both markets and people.

That is exactly why the ECB revamped its communication. As part of the 2021 review of our monetary policy strategy, the Bank committed explicitly to “explaining its monetary policy as clearly as possible to all audiences”. This pledge marked a real sea change in how the ECB announces and explains its monetary policy decisions. Our new-style monetary policy statement is much shorter, measurably less complex, and more understandable than the previous policy announcements. A clear narrative explains our decisions against the backdrop of how we see the economy and inflation evolving. One observer complimented the new style as having “turned Hegel into Hemingway!”.

The ECB also committed to providing the wider public with a “layered” version of the policy announcement. “Our monetary policy statement at a glance” summarises core messages in plain language and pairs them with intuitive visuals. It is available in the 24 official languages of the European Union and spread widely via online and social media.

When we started, quite a few experts worried that clearer words would lead to an unacceptable loss of nuance and precision – to a loss of the “constructive ambiguity” that may be needed at times. It was thought that such an ill-conceived effort would inevitably lead to communications disasters.

But have markets been confused? Has our simple – but not simplistic – approach led to miscommunication? Far from it. 

The ECB’s experience confirms that something as sensitive and market-moving as a monetary policy announcement can be concise, accessible and relatable. Our efforts – mocked by some as “infantilisation of monetary policy” or “Mickey Mouse economics” – have not led to messaging meltdown. In fact, we have seen quite the opposite: clear, simple and accessible messages about our determined efforts to bring inflation back to 2% have arguably helped to prevent people from getting used to prices rising faster during the recent inflation spike.³

Using plain language is essential to reach more people – especially where they get their news. In Europe, that is still television. Central bankers have traditionally shunned TV. It is a medium that does not lend itself to typically lengthy, technical and nuanced monetary policy explanations. But a single appearance with a properly crafted message on prime-time TV literally beams the ECB into the homes of millions of people. No print interview in a quality newspaper has ever come close to achieving such a reach. This is why the ECB stepped up its efforts to get airtime on TV (and also on radio).⁴

Meanwhile, younger people increasingly get their news on social media. They are turning to non-traditional news providers, including influencers. Today, even for central banks, there is no way around a social media presence – and the same maybe even applies to personal accounts for top leaders such as Christine Lagarde. Such direct communication provides an opportunity to give a human face to what are often perceived as faceless technocratic institutions, and to surprise audiences with unexpected formats – and, yes, even humour!  

The continuous competition for attention is forcing central bankers to keep innovating. We have to push boundaries so our content remains attractive, educational and entertaining. Check out the ECB’s new YouTube channel Espresso Economics or The ECB Podcast to see how we are faring.

Good communication is not just a one-way street, it is a dialogue. If we want to build understanding and trust, nothing beats direct interaction with people.

As part of the strategy review of 2021, Eurosystem central banks engaged in so-called listening events, to understand the concerns and expectations of people beyond our usual “in-crowd” of experts. Reaching out to listen not only gives central bankers direct insight into what’s going on in the “real economy”, but is also a chance to foster people’s knowledge and build real connections. After all, for people to support a policy they must first understand it. And this approach works: a recent study of visitors to the ECB shows that the direct interaction with central bankers primed with explanations and educational material brings visitors’ inflation expectations more into line with the ECB’s 2% target. ⁵

But we should also be honest with ourselves: why should anyone except economics nerds care about something as complex as monetary policy? When prices are stable and banks are safe, surely it is rational to be inattentive to these central bank announcements? These questions are fair enough. 

But all these abstract concepts that central banks talk about – inflation, interest rates, financial stability – deeply affect people’s lives. If a financial crisis hits, or the cost of living rises painfully, everyone should understand why the central bank exists, how we serve the public, and why our actions make a tangible difference. Central banks need to communicate so that people can understand. This is what builds and preserves their most valuable asset: people’s trust.  

¹ Schnabel, I. (2025), “Financial literacy and monetary policy transmission”, speech at the at the 2025 Mais Lecture at Bayes Business School

² McMahon, M. & Naylor, M. (2023), “Getting through: communicating complex information”, Bank of England Staff Working Paper No. 1047.

³ Hoffmann, M. et al (2025), “A KISS for central bank communication in times of high inflation”, Bundesbank discussion paper 12/2025.

⁴ Kamps, C. et al (2025) “Report on monetary policy tools, strategy and communication”, ECB Occasional Paper Series, No 372. 

⁵ Jung, A. et al (2025), “ECB visitors – can direct communication alter inflation expectations?”, The ECB Blog.

Gabriel Glöckler is Principal Adviser in the Directorate General Communications at the European Central Bank. He is also a Visiting Professor at the College of Europe in Bruges, Belgium and a lecturer at the Frankfurt School of Finance and Management. The views expressed are those of the author.

This blog is part of a series of opinion pieces that highlight diverse perspectives on the need to restore public finances. Building public support for budget reforms has become a pressing need for OECD countries. This collection offers insights into some of the most promising ongoing efforts to empower public understanding, featuring contributions from thought leaders and practitioners in national governments, multilateral organisations, academia, and civil society. 

The OECD webinar series on Empowering Public Understanding of Public Finances runs through to end of 2026. 

This blog article should not be reported as representing the official views of the OECD or of its Member countries. The opinions expressed and arguments employed are those of the authors.