Hi, I'm Severin de Wit, host of the TrustTalk podcast, where we dive deep into the fascinating world of trust. With a genuine passion for understanding the foundations and nuances of trust, I am dedicated to uncovering its secrets and sharing compelling stories that illuminate its profound impact. Join me on this captivating journey as we explore the transformative power of trust. Subscribe now and become part of the TrustTalk community
Hi, I'm Severin de Wit, host of the TrustTalk podcast, where we dive deep into the fascinating world of trust. With a genuine passion for understanding the foundations and nuances of trust, I am dedicated to uncovering its secrets and sharing compelling stories that illuminate its profound impact. Join me on this captivating journey as we explore the transformative power of trust. Subscribe now and become part of the TrustTalk community
Trust in central banks is critical for the effectiveness of a monetary policy, and for reaching price stability. Today’s guests, Carin van der Cruijsen (senior researcher at De Nederlandsche Bank, the Central Bank of the Netherlands) and Jakob de Haan (professor of political economy at the University of Groningen, Netherlands) talk about the importance of explaining monetary policy actions to the general public, the need for financial knowledge, the relation between trust and inflation, the main driver of trust in financial institutions, and the communication sensitivity of communication by financial markets.
Price stability and independence of the Central Bank
Carin van der Cruijsen:
most central banks have an objective of price stability, and it’s easier to obtain price stability when inflation expectations are well anchored. And trust in central banks can help to anchor those inflation expectations. And trust in central banks is also important for their independence. So it’s going to help preserve the central banks legitimacy and also shield it from political pressure.
Need for clear communication
Jakob de Haan:
(…) there are two reasons why central banks communicate. One is what is called the central bank effectiveness view. So monetary policy becomes more effective by using communication. That type of communication is mainly directed towards financial markets. The second reason why communication is important is because of accountability reasons. Central banks are independent and it’s widely believed that independent central banks should be accountable central banks. In other words, they should explain what they do, they should communicate not just to politicians, but also to the general public.
Book details “Financial Markets and Institutions”: the book can be bought at Paagman Bookstore (for Netherlands and Belgium) or Amazon (international)
About her PhD “The Economic Impact of Central Bank Transparency”
(…) at the time we wanted to know how consumers perceive the transparency of the ECB. And what we found as well, a lot of people don’t even have a perception of the transparency of the ECB, for example, because they do not know that the ECB exists. And there’s also like a gap between what they know about transparency and how they perceive the transparency of the central bank and transparency perceptions they do matter for trust. So people that perceive the ECB to be more transparent, they have more trust in the ECB.
Alan Blinder’s Book
In the interview, we talked about the book by Alan Blinder, “A Monetary and Fiscal History of the United States 1961-2021“, the question was: “In October, Alan Blinder published his book, “A Monetary and Fiscal History of the United States 1961-2021”, which is an engaging history of an interplay of monetary and fiscal policy that would determine the economic fate of the US. What can the ECB or the Dutch Nederlandsche Bank learn from this?”Listen to the reply by Jakob de Haan (or read it in the interview transcript, see below)
Carin van der Cruijsen’s Ph.D
The Ph.D by Carin van der Cruijsen can be found on the website of De Nederlandsche Bank
Podcast Interview
Listen to the interview with Carin van der Cruijsen and Jakob de Haan
On our TrustTalk YouTube channel, you can listen to the interview while reading the subtitles:
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TrustTalk podcast host Severin de Wit interviews Marike Westra, Chief Communications Officer at COFRA, a privately held 6th generation family business on the role of trust in communications. She believes communication is fundamental in creating trust in both business and brands. The interview touches upon the role of social media who have “democratized” society, even if bad actors try to misinform, on the importance of transparency in doing responsible business. She reminds us that things that are closer to you, you tend to trust more. Marike further talks about how employers can influence the direction of their company and the challenges in keeping trust in brands and the importance of data, as part of what we do in communications is a craft. not a science, therefore:
“we should be data-informed, not data-driven”.
Transparency in communications is key to trust. Earning trust in society and as a business requires authentic engagement, which is a long term engagement, requiring courage and commitment.
Honesty is the crux of building trust. People “feel” the authenticity of a company’s honesty, it’s something intangible. Communications can help create a culture in which trust can flourish. She talks about trust towards employees which builds self-confidence and her advice seems to be easier than it in fact is.
Customers inherently feel the authenticity of what a brand says it delivers and what it does, which is based on how a brand has acted in the past. Reputation is what you have done in the past, it is the lens that you use to determine what you expect from somebody or something in the future.
Marike talks about how you “measure” trust, referring to the Reputation Institute. What kind of employer are you, how do you make decisions, where does the power sit? How are you accountable to society, citizenship, leadership, and performance (more than just financial performance). They rate the levels of trust and reputation along those parameters.
You can read the full transcript of the interview with Marike Westra in the PDF below. You can also download the PDF here
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All podcasts are being audio- edited by Job Dijk of Steigerstudios in Veenendaal, The Netherlands
