OTTAWA, Aug 27 (Reuters) - Central banks must engage directly with the people they serve to ensure public confidence in their decisions amid the forces of misinformation that proliferate on social media and the broader internet, the head of the Bank of Canada said on Thursday.
These efforts will be essential as central banks tackle the impact of structural changes to global economies arising from the COVID-19 pandemic, Bank of Canada Governor Tiff Macklem said to a panel at the U.S. Federal Reserve's annual summer symposium.
"While the internet and social media have vastly broadened access to information, they are also awash with misinformation, echo chambers and conspiracy theories - often pushed by bots and trolls, sometimes for nefarious purposes," Macklem said.
"The imperative is to step boldly beyond market transparency and engage with the public to explain how our actions serve our economy-wide objectives," he said.
Central banks are using unconventional monetary policies alongside extraordinary fiscal stimulus to tackle the economic crisis caused by the coronavirus pandemic, and that has challenged public perceptions of their operational independence, Macklem said.
The problem is compounded as "the forces that are pushing misinformation on the public are preying on this crisis," leading a segment of the population to mistrust public authority and experts.
"The independence that is vital for central banks and public perceptions of that independence are under threat in many countries," Macklem said.
(Reporting by Julie Gordon and Kelsey Johnson) ((firstname.lastname@example.org; 1-613-235-6745, Reuters Ottawa Bureau))
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