How was it in 2020?

Weidmann discusses the challenges of monetary policy with young people

A variety of workshops served as a forum for discussing topics including the price stability objective of central banks, the effects of digitalisation on inflation and the role of central banks when it comes to climate policy.

Asked whether the ECB should engage in an active policy of distribution through its monetary policy, Weidmann made it clear that monetary policy should not pursue distributive aims of a politico-economic nature. “The result would be the extreme politicisation of the central bank,” he warned. It would see the central bank impinging on a policy area which is the responsibility of institutions with specific democratic legitimacy. In their capacity as independent institutions, central banks are essentially alien elements in the democratic system. “And the presence of this alien element can only be justified if we stick to our narrow mandate,” explained the Bundesbank President, referring to the Bundesbank’s primary objective of safeguarding price stability.

Improving representation of climate risk

In response to a question on the role of central banks in climate policy, Weidmann showed a willingness to take action. He stressed the need for central banks to ensure that risks for the financial sector arising through climate change are better captured – a point also applying with regard to the existing asset purchase programmes, for example. At the same time, Weidmann drew attention to the limits constraining central bank action: “We are not keeping everything the way it was. But we have to bear in mind the limits of our mandate”. Central banks cannot pursue a climate policy of their own, as otherwise this would compromise their independence, he explained.

Making complex topics easy to grasp

Another topic that was touched upon was the failure of central bank communications to engage with younger members of the public in particular. This is a problem which the Bundesbank is aware of, remarked Weidmann, which is why it is using alternatives like social media in addition to more traditional media outlets such as newspapers. While these do provide a greater reach, it is extremely difficult to communicate complex economic content via such channels. “We need to take care not to forfeit our credibility and with it the public’s trust,” Weidmann commented. Events such as Euro20+ are another way in which the Bundesbank is seeking to communicate more with the younger generation and draw them into the conversation. With one participant commenting that “Formats like Euro20+ are a good way of reaching young people and can promote a culture of discussion”, the approach appears to have borne fruit.

Next round of euro20+ on the horizon

Euro20+ will be back next year, and is set to return as an in-person event. We’ll be updating this website and the Bundesbank’s social media channels with the details so stay tuned!