This will be a core theme of my lecture today: namely that certain aspects of social capital – in particular trust and credibility – are essential for an independent central bank to achieve its mandate, and in achieving our mandate we can, in turn, help to build and sustain economic capital.
In some emerging markets today, for example, property rights of the rich do not enjoy widespread popular support because so many of a country’s fabulously wealthy oligarchs are seen as having acquired their wealth through dubious means. They grew rich because they managed the system, not because they managed their businesses well.