How central banks cope with market demands

The world’s central banks have a duty to serve two very different user groups – professionals and the public. Some manage it online with panache and some do not.

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Visitor numbers to central bank sites must have broken records in August. Professionals and the ‘interested punter’ alike will have wanted to see what the Fed – the US Federal Reserve – and its equivalents round the world have been saying and doing about the tremors running through the financial world.
One of my dark secrets – not a great chat-up line – is that I find central bank websites extraordinarily interesting. First, almost every country has one, which means I can wander around the world seeing how essentially the same job is being done in Tajikistan (nbt.tj), Tonga (reservebank.to) and Thailand (bot.or.th). The Bank for International Settlements, the central banks’ central bank, lists 163 central bank links on its own excellent site, and that’s including only two of 13 the US has.
Second, as I have said, central banks are trying to serve two very different markets – professional and public – which is like to trying to combine an academic journal and a popular newspaper into one publication.
The core market is made up of specialists in the markets, governments, academia and the like. They want announcements, speeches briefings, publications and vast quantities of data. But, as publicly owned institutions, central banks (or most or them) also feel a duty to explain the financial and banking system to their owners: us. In August more of both groups, I would guess, have been visiting the Fed and its equivalents around the world. They will have found that some central banks manage to serve everyone with panache; others (too many) do not.

The Fed fails to impress


Unfortunately, one of the less successful efforts is the US Federal Reserve site, which is a bit of a mess. ‘Breaking news’ is a dramatic heading that is quickly undermined by headlines such as ‘Approval of proposal by The State Export-Import Bank of Ukraine’. These are simply the latest press releases – hardly ‘breaking news’. One headline is related to the crisis – ‘FOMC statement’ – and would be recognised by professionals, but would mean little to the passer-by.
Am I being harsh? After all, the Fed has to be incredibly careful what it says and how it says it. I don’t think so. Look at the sites of some of the other banks in the Federal Reserve System and you will find a much clearer approach. The St. Louis Fed home page provides a headline that actually says something (‘FOMC: Ready to mitigate effects of financial disruption’) as well as a summary of two relevant releases. In other words, it uses simple editorial techniques to shed light on the obscure.
Inside, many pages on the Fed site appear to have no navigational links – unless you scroll right down to the bottom to find a small and varying selection. This is breaking the first rule of navigation: be conventional or you will confuse your visitors. The site does have a sophisticated data download system and useful information for individuals, including a topical list of ‘foreclosure resources for consumers’, but the general feel is that it is not as polished as many of its equivalents around the world.

Outpaced by other sites


Some of these more polished sites are within the Fed’s own network. The dispersed nature of the US central banking system has both drawbacks and advantages on the web. Anyone seeking specific publications can easily get confused. Even the New York Fed site, one of the best, has three separate publications areas. The most sophisticated, the Publications Catalog, does not feature in the main navigation because it is a standalone site, run by the bank but shared with the rest of the network – an inevitable source of confusion.
On the other hand the Americans win hands down on educational content, a key role for many central banks, because each of the 13 sites has its own resources that are accessible from any of the others. These range from Peanuts & Crackerjacks, “an interactive baseball game that tests your knowledge of economics and pro sports trivia”, from the Boston Fed to a role-playing game that recreates the Federal Open Market Committee on the New York Fed site. To give the central Fed a break, its education site is the best of the lot.
For the best statistical resources, until recently I would have pointed you to the Banco de Mexico, showing that rich countries do not have all the best tunes. It is still impressive, but has now been overhauled by the Bank of England. The interactive database here is amazing – it lets you drill down through a massive collection of data series, tick any number you want, and display them in four different formats, with all sorts of options. Some data goes back to 1963. I imagine that researchers, analysts and other looking for detailed UK data must be very happy bunnies.

The best at serving everyone


I could ramble for ages about the many subtleties (and even some hilarities) of central bank sites. But I’ll point instead at sites that try really hard to serve the professional and general audiences equally. First, the Bank and England and New York Fed both take care to speak in an exceptionally clear voice. They do not patronise the experts, but make sure that complex subjects such as monetary policy are well explained to any reasonably intelligent visitor. Contrast how the Bank of England and the Reserve Bank of Australia site explain monetary policy – light versus dark (legalistic).
Then there is perhaps my favourite, the Bank of Canada. Its trick is to mix technical and public material in the same area and to exploit the web’s abilities to bring economics to life. Have a look at the inflation page. Here you will find technical briefings, but also the Inflation Calculator, which allows you to put in ‘a basket of goods worth C$X’ on any date since 1914, and see what it would cost on any subsequent date. This can be a serious tool, an after-dinner party game or, for me, a final answer to any number of disputes I have had over just how much currency has depreciated since my father was a lad, I was a lad or whenever.
First published on ft.com 31 August 2007

First published 05 September, 2007
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