A lack of trust weakens the central bank and makes it vulnerable to political pressure. So central banks, like all institutions, need to build social capital. There are many definitions but I like to think of social capital as “the social connections, attitudes and norms that contribute to societal wellbeing by promoting coordination and collaboration between people and groups in society”15.
Trust is stronger where social capital is strong. Central banks can help build social capital through their actions but also through their communications. In uncertain times, such as we are living in today, this matters. The ECB will deliver on its mandate of price stability.