I have a lot of time and real admiration for our central bank, Bank of Jamaica; after all, I worked for 10 years at the Bank of England 🙂 But, my feelings are not knee-jerk ones of kindred spirits. I really admire what they are trying to do to make their business more understandable for a wider audience.
The principles, practices and language of central banking are not always easy to understand. Most people understand what money is, though they may have to be guided to realise it’s not just cash, but also money held on deposit to be used in payment; that it can include domestic currency as well as foreign currencies.
The exchange rate and foreign currency loom large in the thinking of countries like Jamaica, that have a lot of business with foreigners and can literally see money coming in and going out of the economy, and the movement of the exchange rate is often felt or perceived sharply. But, again, much more foreign currency flows than is visible to the ordinary citizen: banks and other financial institutions, corporations, government and some individuals conduct their transactions well away from the sight of people, as massive flows move between accounts. For the longest while, Jamaicans had to pay careful attention to the exchange rate and foreign currencies because the latter was in real short supply and the former reflected that as it went on a move to lower values. That’s changed in reality as the country moved to a floating exchange rate, though this hasn’t necessarily been well understood by many.
Jamaicans, not unlike lots of people, stake their pride on the strength of their national currency against others. The anguish of a major devaluation or a series of depreciations is real for policy makers as well as citizens, and I remember how Britons reacted when the pound sterling was devalued in 1967, from US$2.80 to 2.40 (14%) and PM Harold Wilson needing to reassure people that the “It does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued.” Whether Britons understood how this was an alternative to massive foreign borrowing, I can’t say.
Then, we have inflation, or the movements in the so-called general price level. Lots of people struggle to understand that prices going up or down is not really what inflation means, but whether this is persistent.
Wrapping all of that up and talking about each and every as part of monetary policy usually leaves many reaching for the off button or swiping away from that output. Let’s not even try to talk about what it means to supervise the financial system and macro-prudential concerns.
But, what the BOJ has done is to unpack a lot of the mystique and make it simpler to understand. They’re now famous for putting monetary policy to music. What was as notable as the medium was the international acclaim for the initiative:
For what it’s worth, the Bank of England had tried long before to make what it does a bit more accessible, but to a more limited extent, and not in as catchy a way.
But, cometh the moment, cometh the man, and the BOJ has seized the power of social media fully in all its glory.
Generally, the BOJ has sought to really engage the public through this medium. It’s common for it to use its Twitter feed to have real conversations about topical matters and it’s carved out a style that’s also jovial, including with its sort of dorky ‘spokesperson’, Croc-O. Doyle, who has become a literal mouth piece for the bank. Everything you ever needed to know about the difference between alligators and crocodiles was explained by the BOJ:
It’s had a number of efforts to calm national nerves about the exchange rate, which is not running away, but people seem to treat with apocalyptic fears with each downturn.
Yesterday, it did something a bit different but necessary in terms of ‘setting the record straight’ by summarily dissecting the misinformation circulated by a commentator on matters economic, John Jackson:
One could say the croc bit down hard on its victim and wrestled the life out of him with some vicious clamping of the jaws.
I don’t want to stir the pot too much more, but this is what we need a lot more of from public institutions: letting the public know what they do on a regular basic and dealing with the flurry of misinformed, ill-informed, or downright wrong facts and opinions. I’m not going to say anything about the style or tone—my own fingers get very sharp edges when people just getting their facts wrong 😉