Complexity of central banking challenges its legitimacy

STOCKHOLM: Central banking is becoming increasingly complex and difficult for the public to understand, eroding confidence in banks and supporting the case for new ways to communicate, European Central Bank board member Benoit Coeure said on Friday.

Inflation may react slower to unconventional policy so the public could struggle to understand what central banks are doing, challenging their legitimacy, Coeure told a conference in Stockholm.

"Output legitimacy may be more difficult to assert if inflation is proving to be less reactive to central bank actions in the short term," he added.