OTTAWA — The head of the Bank of Canada is making an international pitch to his fellow central bankers to better connect with average citizens lest they lose public trust and face an existential crisis.
Governor Tiff Macklem says maintaining trust is key for central banks during the economic crisis caused by COVID-19, as well as for rebuilding once the pandemic passes.
He points to declining trust in public institutions and experts, as well as the rise of political populism in the wake of the 2008 financial crisis, as trends central bankers cannot brush off.
Macklem says it’s more important, yet harder, for central banks to be trusted sources of information at a time when they have rates near-zero and are using unconventional policy tools.
For the Bank of Canada, that has meant a foray into what’s known as quantitative easing, which is a way for central banks to push money into the economy to encourage lending and investment.
Speaking at an annual meeting hosted by the Federal Reserve Bank of Kansas City, Macklem says central bankers shouldn’t sound like “oracles delivering messages from an ivory tower.”