Question

Discuss briefly about 'Moral suasion'.

Answer 1

Moral Suasion refers to a type of influencing procedure which is applied by Central Banks to keep the pressure on commercial banks in order to abide by the monetary policies that are established. It is carried out by transferring speeches, seminars and meetings.

Highlights of Moral Suasion

Listed below are the few key points of Moral Suasion

• Moral suasion is a moral act of persuasion appeal to modify or change behaviour using verbal or rhetorical techniques, as objected to force.
• Although, these oratorical techniques can certainly involve threats or provocative speech.
• In economics, central bankers try to control the market and public sentiment through efficient techniques that they are in control of the economy and willing to act if needed.
• Most of this session includes verbal gestures and signalling through central bank minutes that can be pulled apart by investigators and journalists.