Why The World's Central Banks Are Turning To Twitter
It's about the money ... (and other stuff)
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.
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.