Was this a too adventurous path to embark on? The toughest challenge for monetary authorities, as financial markets become too addicted to central bank guidance, is to identify smart ways to communicate in due course how and in which manner the shift to normalisation will take place, while also clarifying the limits of their actions and influence. All for a pretty good reason: avoid a possible addiction crisis that could in itself lead to turmoil and volatility. The real test for forward guidance is not the manner or techniques used to disseminate information, it rather occurs when the forward guided policies are implemented. That is the point where the actions meet or not the expectations fuelled beforehand. Forward guidance relies on the central banks’ credibility, validated in time by matching its commitments, a quick adjustment of messages, clear accountability for forecast errors and even for misjudgements. It is also important to explain the context in which they operate. In monetary policy communication, the guidance of expectations, constant explanations and educational projects have been building knowledge and trust. Financial stability is a more sensitive area, though. Central banks often come across different views of other public actors: authorities, governments or parliament members. Post-truth environment In a world of uncertainty, with incomplete information about the prospects and state of the economy, information about central banks’ strategy is a necessary, although insufficient, condition for the general public and market participants to understand decisions and shape their expectations.

Thus, central banks may implement, successfully, different communication strategies that may be appropriate and optimal given the above1/5  BIS central bankers' speeches  mentioned factors. As most central banks, including the National Bank of Romania, have opened up a lot in recent years – by reviewing, adapting and refining their strategies, using modern and social media tools –, an effective communication approach should always include a degree of flexibility in order to respond to a rapidly changing economic environment, exceptional circumstances as well as the level and appetite for financial knowledge in the society. Forward guidance The global financial crisis pushed central banks to expand and heavily use their monetary toolkits besides identifying new instruments for the more delicate financial stability area. One weapon in their arsenal, involving a strong communication approach, was forward guidance, which was put to good use in the monetary policy field as central bankers attempted to calm the markets. Wisely exploiting the power of words, forward guidance was aimed at improving monetary policy transmission by offering more than just a glimpse at the central banks’ next moves. Greater predictability of the reaction function or an associated timing for the next actions enable market participants to better calibrate expectations. It worked in several instances. It also increased the initial framework to include, apart from the traditional policy rate, references to some other parts of the central bank’s toolkit (asset purchases), offering markets nice hooks to cling on in times of stress and heightened uncertainty.