Why The World's Central Banks Are Turning To Twitter

It's about the money ... (and other stuff)

Banking on the blue bird
Nessim Aït-Kacimi

PARIS — To be efficient and credible, decisions made by central banks need to be widely known, clearly communicated and distributed quickly. They have to adapt their communication strategies, therefore, to the ways information in consumed and redistributed, including by platforms such as Twitter.

By the end of 2008, there were just five central banks registered on Twitter. Today there are more than 100, or six out of 10, according to a study by the Official Monetary and Financial Institution Forum (OMFIF). Nearly three-quarters of the central banks in Europe and the Americas have a Twitter account, while in Asia and Africa it's less than one in two. The People's Bank of China still has not taken this step.

The great recession and new unconventional support policies pushed central banks to communicate more, especially on social media networks. And on June 2, 2008, the first to take the leap and create a Twitter profile was the Bank of Canada. Eight days later, the Federal Reserve Bank of New York did so as well. The U.S. Federal Reserve set up its account the following year.​

In 2008, there were just five central banks on Twitter. Today there are more than 100.

Today the central bank with the most followers on Twitter is Indonesia's (nearly 700,000), followed by Mexico (663,000) and the United States (554,000). U.S. President Donald Trump has 120 times more followers than does the Federal Reserve (Fed), which he has constantly criticized over Twitter.

Photo: Thomas8047

Fourth on the list, with 510,000 followers, is the European Central Bank (ECB), while those of developing nations such as India, Colombia, Brazil, Venezuela, Nigeria, Peru and Kenya are all in the top 15. But which central banks actually use Twitter the most? The Mexico and El Salvador banks, it turns out, with an average of seven to eight tweets per day, followed by the bank of India (six), the ECB (under four tweets a day), and the bank of England (just over two messages).

Twitter allows banks to relay their decisions, and foster communication among its members. The central banks of developing countries tend to tweet more often about currency issues, inflation (particularly in South Africa), and occasionally about fintech, companies that are halfway between finance and technology (Singapore).

Some central banks also make education posts about bank tools and indicators that are meant more for the general public than finance professionals. The ECB"s most popular and re-tweeted post was an explanation of how it "created" money as part of a plan for quantitative flexibility.​

Twitter allows banks to relay their decisions, and foster communication among its members.

Across the board, central banks are very enthusiastic about advertising their newest banknotes. A case in point was the Swiss National Bank's announcement — and most retweeted post — of a new 1,000-Swiss-franc bill.

But it's also worth noting that few central bankers have a personal account on Twitter. Exceptions include Olli Rehn, governor of the Bank of Finland, Neel Kashkari, president of the Federal Reserve of Minneapolis, and David Andolfatto of the Research Department of the Fed of St. Louis. The topics they share revolve around the economy and economic research, or recent news like cryptocurrencies, for example.

Even former officials like Vitor Constancio (ECB) and Ben Bernanke (President of the Fed) tend to be cautious and stay on the Twitter sidelines. Bernanke, for example, has been careful not to make public comments on the policy decisions of his successors. There's wisdom, it appears, in also knowing when not to tweet.

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European Debt? The First Question For Merkel's Successor

Across southern Europe, all eyes are on the German elections, as they hope a change of government might bring about reforms to the EU Stability Pact.

Angela Merkel at a campaign event of CDU party, Stralsund, Sep 2021

Tobias Kaiser, Virginia Kirst, Martina Meister


BERLIN — Finance Minister Olaf Scholz (SPD) is the front-runner, according to recent polls, to become Germany's next chancellor. Little wonder then that he's attracting attention not just within the country, but from neighbors across Europe who are watching and listening to his every word.

That was certainly the case this past weekend in Brdo, Slovenia, where the minister met with his European counterparts. And of particular interest for those in attendance is where Scholz stands on the issue of debt-rule reform for the eurozone, a subject that is expected to be hotly debated among EU members in the coming months.

France, which holds its own elections early next year, has already made its position clear. "When it comes to the Stability and Growth Pact, we need new rules," said Bruno Le Maire, France's minister of the economy and finance, at the meeting in Slovenia. "We need simpler rules that take the economic reality into account. That is what France will be arguing for in the coming weeks."

The economic reality for eurozone countries is an average national debt of 100% of GDP. Only Luxemburg is currently meeting the two central requirements of the Maastricht Treaty: That national debt must be less than 60% of GDP and the deficit should be no more than 3%. For the moment, these rules have been set aside due to the coronavirus crisis, but next year national leaders must decide how to go forward and whether the rules should be reinstated in 2023.

Europe's north-south divide lives on

The debate looks set to be intense. Fiscally conservative countries, above all Austria and the Netherlands, are against relaxing the rules as they recently made very clear in a joint position paper on the subject. In contrast, southern European countries that are dealing with high levels of national debt believe that now is the moment to relax the rules.

Those governments are calling for countries to be given more freedom over their levels of national debt so that the economy, which is recovering remarkably quickly thanks to coronavirus spending and the European Central Bank's relaxation of its fiscal policy, can continue to grow.

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive.

The rules must be "adapted to fit the new reality," said Spanish Finance Minister Nadia Calviño in Brdo. She says the eurozone needs "new rules that work." Her Belgian counterpart agreed. The national debts in both countries currently stand at over 100% of GDP. The same is true of France, Italy, Portugal, Greece and Cyprus.

Officials there will be keeping a close eye on the German elections — and the subsequent coalition negotiations. Along with France, Germany still sets the tone in the EU, and Berlin's stance on the brewing conflict will depend largely on what the coalition government looks like.

A key question is which party Germany's next finance minister comes from. In their election campaign, the Greens have called for the debt rules to be revised so that in the future they support rather than hinder public investment. The FDP, however, wants to reinstate the Maastricht Treaty rules exactly as they were and ensure they are more strictly enforced than before.

This demand is unlikely to gain traction at the EU level because too many countries would still be breaking the rules for years to come. There is already a consensus that they should be reformed; what is still at stake is how far these reforms should go.

Mario Draghi on stage in Bologna

Prime Minister Mario Draghi at an event in Bologna, Italy — Photo: Brancolini/ROPI/ZUMA

Time for Draghi to step up?

Despite its clear stance on the issue, Paris hasn't yet gone on the offensive. That having been said, starting in January, France will take over the presidency of the EU Council for a period that will coincide with its presidential election campaign. And it's likely that Macron's main rival, right-wing populist Marine Le Pen, will put the reforms front and center, especially since she has long argued against Germany and in favor of more freedom.

Rome is putting its faith in the negotiating skills of Prime Minister Mario Draghi, a former head of the European Central Bank. Draghi is a respected EU finance expert at the debating table and can be of great service to Italy precisely at a moment when Merkel's departure may see Germany represented by a politician with less experience at these kinds of drawn-out summits, where discussions go on long into the night.

The Stability and Growth pact may survive unscathed.

Regardless of how heated the debates turn out to be, the Stability and Growth Pact may well survive the conflict unscathed, as its symbolic value may make revising the agreement itself practically impossible. Instead, the aim will be to rewrite the rules that govern how the Pact should be interpreted: regulations, in other words, about how the deficit and national debt should be calculated.

One possible change would be to allow future borrowing for environmental investments to be discounted. France is not alone in calling for that. European Commissioner for Economy Paolo Gentiloni has also added his voice.

The European Commission is assuming that the debate may drag on for some time. The rules — set aside during the pandemic — are supposed to come into force again at the start of 2023.

The Commission is already preparing for the possibility that they could be reactivated without any reforms. They are investigating how the flexibility that has already been built into the debt laws could be used to ensure that a large swathe of eurozone countries don't automatically find themselves contravening them, representatives explained.

The Commission will present its recommendations for reforms, which will serve as a basis for the countries' negotiations, in December. By that point, the results of the German elections will be known, as well as possibly the coalition negotiations. And we might have a clearer idea of how intense the fight over Europe's debt rules could become — and whether the hopes of the southern countries could become reality.

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