Clear communication of the central bank’s objectives, policy strategy and its decisions proved essential to anchoring inflation expectations and enhancing monetary policy effectiveness. However, most research works in this area show that increased transparency is not enough. A central bank must demonstrate commitment and ability to achieve its objectives through a systematic implementation of its policies. The markets and the public at large need to be convinced by central banks through consistent and effective words and policy actions, formulated as plainly as possible, in order to build knowledge and confidence – all vital for an effective management of public expectations. Despite a growing recognition of the importance of transparency in monetary policymaking, no consensus has emerged yet – either among academics or central banks. There is still debate on what is the appropriate degree of transparency or the best communication path, so that the two factors can contribute to an effective achievement of policy objectives as well as an efficient market functioning. The ‘best practice’ in the field depends, inter alia, on the size, structure and complexity of the economy, its global interlinkages and policy cycles, the monetary policy objectives and strategies, the political environment and institutional framework of a particular central bank, as well as on the extent and nature of uncertainty faced by policymakers. When assessing communication, one should take into account various economic, political and institutional factors in addition to the elements of uncertainty a central bank faces, no matter how modern the communication tools it employs.

A careful calibration of wording is needed, along with greater efforts to explain the role and limits of central banks in the financial field, in order to secure confidence. All this becomes even more challenging given the fast-moving, ‘post-truth’ environment plagued by populism. As impatience has filtered in many domains, an erosion of confidence in the independent, accountable public institutions has emerged, as did the risk of exposure to swings in the economy, due to a change in sentiment. 2/5  BIS central bankers' speeches  To cope with this, central banks across the globe have boosted their efforts to educate, increase financial literacy, outreach and dissemination capacities, while trying to deal with the growing challenges related to fake news and negative campaigns. I would like to draw your attention to some recent, new tools – first, an ECB educational product called ‘Visitor Centre...to Go’ that briefs in plain language the institutions’ key messages and knowledge in an easy-to-carry format – a suitcase! Any ECB expert can use this kit during visits to schools or universities. Secondly, an interesting way to counterbalance fake news campaigns is the one used by the central bank of Ukraine – winner of 2019 Central Banking Publications award for transparency. They created a page on their website as well as infographics, with simple and relevant data, to dismiss fake news about local banks as the sector was struggling with a critical situation. Therefore, effective central bank communication for the whole spectrum of its policies is an ongoing challenge.