Moral suasion,
Definition of Moral suasion:
Non-official tool of monetary policy which governments employ to persuade (instead of coerce through law making power) financial institutions in following suggested guidelines on the availability and cost of credit. Moral suasion is used typically by making policy announcements to induce the desired response, before resorting to mandatory compliance through statutory regulations.
Anyone can in principle use moral suasion to try to convince another party to change their attitude or behavior, but in an economic context it generally refers to central bankers' use of persuasive tactics in public or private. It is often simply called "suasion": the motives behind it are not always altruistic, but have more to do with the pursuit of particular policies.
Moral suasion is the act of persuading a person or group to act in a certain way through rhetorical appeals, persuasion, or implicit & explicit threats—as opposed to the use of outright coercion or physical force. In economics, it is sometimes used in reference to central banks.
How to use Moral suasion in a sentence?
- Moral suasion is a moral act of persuasion appeal to influence or change behavior using verbal or rhetorical techniques, as opposed to force.
- Most of this sausion involves verbal gestures and signalling through central bank minutes that can be picked apart by analysts and journalists.
- In economics, central bankers try to influence market and public sentiment through persuasive techniques that they are in control of the economy and ready to act if needed.
- Although, these rhetorical techniques can certainly involve threats or provocative language.
Meaning of Moral suasion & Moral suasion Definition