Friday, 18 April 2014
Quantitative easing explained visually
The financial world loves to play with words. Jargon is rife. It is rarely static. It mutates constantly or dies a sudden death.
To the outsider, financial terms are often impenetrable. Even an insider can go on holiday and return out-of-touch two weeks later. Recent glossary research uncovered a wealth of videos on financial topics to share with followers.
Financial reporting often mystifies the general public. The economic crisis has left ordinary people with a deep mistrust of the banking world. Quantitative easing causes particular bewilderment. A US video from 2010 with over 5.7 million viewings conveys that sense of bewilderment in a humorous and irreverent way:
Quantitative easing is an unconventional monetary policy. It is often seen as controversial. The unconventional is now apparently conventional. The Federal Reserve, the Bank of England and Bank of Japan have all used the policy. The European Central Bank may soon resort to quantitative easing. One of the Bank of England’s external policymakers has just claimed that quantitative easing increased the UK’s GDP by 3%.
Quantitative easing is often described as printing money. The aim is to increase the money supply in the economy. No actual money gets printed. These days the money is injected into the economy electronically.
Younger generations are much more likely to watch a short explanatory video than read a turgid glossary or lengthy text. HP has an excellent paper on the power of visual communication.
The Bank of England has issued just such a video to explain how quantitative easing works:
Terminology often needs to be accessible to several different target audiences. A company or institution may need to use different terms in targeted communications. Traditional glossaries have advocated a single, consistent term. Modern marketing communications are increasingly personalised. The fund manager’s in-house terminology is not appropriate for some audiences. Terminology management will need even greater flexibility in future.
The new banking era requires greater transparency. Greater use of short videos to ease understanding of financial terminology for different audiences would seem to be an ideal way forward.
What do you think?