Enhancing the Attractiveness and Readability of Central Bank Reports: An Experiment

Abstract

Central banks can use their communication with the citizens as a tool to increase the efficiency of their monetary policy objectives. A forerunner in this sense is the Bank of England (BoE), who has already started layering its publications, by enhancing their readability, making the texts easily understandable and attractive visually, so that they can address an audience as broad as possible. Using the BoE approach, the text of one Monetary Policy Report (MPR) of the European Central Bank (ECB) has been layered in one control condition (the Monetary Policy Decision of December 2018) and four treatment groups, consisting of the same text, written in four different ways (the Objective and the Subjective Visual Summary, the Objective and the Subjective Relatable Summary). The citizens' comprehension and trust levels of every text were then tested, to find the best writing and visual text presentation technique that would enhance the efficiency of the ECB's communication strategy. In this way, the entire MPR was made more understandable for the citizens, making it more user friendly and logic, thus increasing the visibility of the organization and allowing it to be more friendly perceived. It is well known that communication and monetary policy are linked: if the recipients of a central bank message understand and trust it, they will act accordingly and thus develop a unique contribution in helping the ECB positively support the economy and the entire banking system and indirectly help it properly implement its monetary policy goals. The results of an empirical investigation conducted on the above-mentioned texts among European citizens showed that citizens tend to trust texts that are easily understandable and visually attractive and that they like objectively and simple presented information. The results of our study could be also replicated by national banks of the European Union and/or other public institutions that could benefit from enhanced trust, a better image and develop a proper binding towards citizens.

Adapting the Digital Servuction Model to Central Banks: Case Study: European Central Bank

“…Measurement of e-service quality is relevant in a world in which digitalization provides a voice to citizens, making their opinions count progressively, with their weight as central bank stakeholders expanding (Prodan and Dabija 2022).…”

“…Early in 2020, readability declined, undoing the achievements made in Lagarde's first several months in office (Glas and Müller 2021;Lazarevic et al 2022). Several euro area studies (Calvo et al 2013;Haldane and McMahon 2018;Prodan and Dabija 2022) highlight the fact that regular citizens who do not have higher education degrees have difficulties in comprehending essential publications such as the inflation reports outlining the Bank's monetary policy directions. Haldane and McMahon (2018) performed a study in which the BoE inflation report was rewritten and made easily understandable to all citizens.…”

“…Haldane and McMahon (2018) performed a study in which the BoE inflation report was rewritten and made easily understandable to all citizens. The same experiment was conducted on the ECB inflation report in 2022 (Prodan and Dabija 2022), with the purpose of finding out whether better readability brought about an increased level of trust in the Bank's actions. According to the results of both studies, inflation reports that are easily understood by citizens are viewed positively and enhance their trust in the messages contained therein.…”

“…In a further step, it would be interesting to disseminate the questionnaire to a larger and less homogeneous sample, increasing the robustness of the results and offering more statistical power, by verifying whether people with different backgrounds (education, profession, age, and geography) have different expectations and perceptions when it comes to ECB e-service quality. Studies have already shown that people with a lower educational level are more likely to trust more readable information and visually attractive texts (Prodan and Dabija 2022), and that layering central bank website reports increases citizen trust and satisfaction (Hayo and Neuenkirch 2015;Bholat et al 2017).…”