More than 10 years after the crisis, central banks are hoping the public will give them a new direction

Central banks are experiencing a soul-searching moment as they look to strengthen their popularity after the global financial crisis — an exercise that could ultimately change how they operate.

The European Central Bank (ECB) is hosting its first “listening event” in Brussels next month. President Christine Lagarde is set to discuss with European citizens the role of the central bank across the 19-country region. However, the ECB is not the first major central bank to organize such events. The U.S. Federal Reserve announced in late 2018 that it would be reviewing its work, which included several “Fed Listens” events across the country. The results are set to be unveiled in the first half of 2020.

“The ECB is simply imitating the Fed, and both are doing the public consultations because they feel insecure as their instruments seem to have lost ‘bite,’” Daniel Gros, the director of the Brussels-based think tank CEPS, told CNBC via email.

Different analysts argue that central banks are conducting these public exercises to receive reassurances on what they do, at a time when many have doubts about the effectiveness of their policy tools.
“Hoping to heal rifts between the ECB and the general public, in some countries, is certainly a big part of the exercise,” Florian Hense, an economist at Berenberg bank, told CNBC.
Erik Jones, a professor at the Johns Hopkins University, said “there is a lot of talk about the need for central banks to communicate more transparently … Part of this may be the result of a sense of exposure that central bankers felt when they were ‘the only game in town’ in the depths of the crisis.”

Central banks have changed
The two major central banks have undergone a massive change in the aftermath of the global financial crisis. They were forced to expand their balance sheets and announced unconventional measures to support their respective economies. But the global financial community is now questioning whether both central banks have reached a limit.

The International Monetary Fund said in November that “concerns about the expanded activities of central banks led to skepticism about the necessity or the appropriate degree of central bank independence.” At the same time, the general public seems largely unaware about the work conducted by these institutions.