Central Bank Communication and Public Trust: The Case of ECB Speeches

76 Pages Posted: 23 Jun 2022

See all articles by In Do Hwang

In Do Hwang

Bank of Korea

Thomas Lustenberger

Swiss Financial Market Supervisory Authority (FINMA)

Enzo Rossi

Swiss National Bank; University of Zurich

Multiple version iconThere are 2 versions of this paper

Date Written: June 15, 2022


Does communication influence trust in the central bank? We examine this question using survey data covering 488,000 Eurozone citizens from 1999 to 2019. We find compelling evidence that more communication, as measured by the number of speeches made by representatives of the Eurosystem, negatively impacts citizens’ trust in the ECB. This holds for speeches as a whole and for different groups of speakers. This effect was exacerbated during the global financial and European sovereign debt crises. The estimated long-term effect is substantial. An increase in the number of speeches per year by 100 reduces the share of those expressing trust in the institution by 6-11 percentage points. We do detect a positive result from more speeches in the form of increased informedness on the ECB and the EU. However, the overall negative effect prevails. In addition to individuals’ socioeconomic status, macroeconomic conditions influence the trust-building process, albeit less robustly. Specifically, higher unemployment, public debt ratios, financial stress, and policy uncertainty weigh negatively, whereas GDP growth and a higher policy rate tend to enhance trust.

Keywords: Trust in central banks, central bank communication, panel data, Eurobarometer survey

JEL Classification: E58, E52, E71, D83, D80

Suggested Citation

Hwang, In Do and Lustenberger, Thomas and Rossi, Enzo, Central Bank Communication and Public Trust: The Case of ECB Speeches (June 15, 2022). Available at SSRN: https://ssrn.com/abstract=4138348 or http://dx.doi.org/10.2139/ssrn.4138348

In Do Hwang

Bank of Korea ( email )

110, 3-Ga, Namdaemunno, Jung-Gu
Seoul 100-794
Korea, Republic of (South Korea)

Thomas Lustenberger (Contact Author)

Swiss Financial Market Supervisory Authority (FINMA) ( email )

Laupenstrasse 27
Bern, 3003

HOME PAGE: http://www.finma.ch

Enzo Rossi

Swiss National Bank ( email )

Fraumuensterstr. 8
Zuerich, 8022

University of Zurich ( email )


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