The impact of the green direction in central banking on the general public's trust: Evidence from Hungary

Climate considerations are rising on the agenda of central banks worldwide. Given the importance of the general public's trust for the success of central bank policy, the objective of our study is to examine how this trust may change in response to green central bank measures. We rely on an independently conducted survey of 1000 Hungarian adults and apply multinomial and ordered logistic regressions. Our results indicate that even in an environment of high inflation, there is potential for some increase and limited risk of decrease in trust. We find that green variables are more important in explaining variance than those associated with the economy or institutions. A higher level of climate worry, seeing environmental protection as important, being a woman and being a student are associated with an expectation that trust would increase following the central bank's pro-environmental measures. Our findings provide support for the central bank's green programme and do not point to a need to modify the green programme, public relation efforts or the conducting of monetary policy on account of negative trust implications. Findings may be useful for other jurisdictions due to similarities in the trust-building process, climate change concerns and the monetary policy framework.