Douglas, N (1945), ‘An Almanac’, Chatto & Windus with Martin Secker & Warburg Ltd. DuBay, W (2004), ‘The principles of readability’, Impact Information. Economic Policy Institute (2015), ‘Top CEOs make 300 times more than typical workers’, Issue Brief #399, available at: http://www.epi.org/files/2015/top-ceos-make-300-times-morethan-typical-workers.pdf. FEMR (2015), ‘Fair and Effective Markets Review: Final Report’, available at: http://www.bankofengland.co.uk/markets/Documents/femrjun15.pdf. Field, J (2003), ‘Social Capital’, London: Routledge. Friedman, M and Schwartz, A (1963), ‘A Monetary History of the United States, 1867–1960’, ISBN: 9780691003542. Froot, K, Scharfstein, D, Stein, J (1993), ‘Risk management: Coordinating corporate investment and financing policies’, The Journal of Finance 48 (5), 1629–1658. Fryer, R (2006), ‘Acting White: The social price paid by the best and brightest minority students’, Education Next 6 (1) 53–59. FSB (2015), ‘Financial Reforms – Finishing the Post-Crisis Agenda and Moving Forward’, letter from the FSB Chairman to G20 Finance Ministers and Central Bank Governors, available at: http://www.fsb.org/wp-content/uploads/FSB-Chair-letter-to-G20-February2015.pdf. G30 Working Group (2015), ‘Banking Conduct and Culture: A Call for Sustained and Comprehensive Reform’, available here: http://group30.org/images/uploads/publications/ G30_BankingConductandCulture.pdf. Guiso, L, Sapienza, P and Zingales, L (2004), ‘Does local financial development matter?’, Quarterly Journal of Economics 119, 929–969. Guiso, L, Sapienza, P and Zingales, L (2008), ‘Trusting the stock market’, Journal of Finance Vol LXIII, No 6. Guiso, L, Sapienza, P and Zingales, L (2015), ‘Corporate Culture, Societal Culture, and Institutions’, NBER Working Paper No 20967, available at: http://www.nber.org/ papers/w20967.pdf. Haldane, A, (2015), ‘Who owns a company?’, speech at University of Edinburgh Corporate Finance conference, available at: http://www.bankofengland.co.uk/publications/Pages/ speeches/2015/833.aspx.
19  For example, Knack and Keefer (1997), La Porta et al (1997) and Boulila et al (2006). 20  Guiso et al (2008) and Zingales (2015). 4  information  please  see  http://www.financial-  BIS central bankers’ speeches  and protracted erosion of social capital. It puts finance on notice for losing its social licence. And, unaddressed, that jeopardises future wealth and well-being. The trust problem If this trust in finance problem is to be tackled, it needs first to be understood. Why trust is important, and what determines it, are issues that have occupied the world’s greatest minds for centuries, perhaps millennia. The philosopher Baroness O’Neill from Cambridge University often draws an important distinction between “trust” and “trustworthiness”. 21 Although this may sound subtle, it carries important implications. Seeking to maximise trust may be an unrealistic and, indeed, undesirable objective for society. In a world of risks and uncertainties, including about individuals’ trustworthiness, people need sometimes to mistrust if they are to avoid bad choices. If the principle of caveat emptor – buyer beware – is to work effectively, not just in financial services but more broadly, it requires a constructively sceptical public. Like cholesterol, there is such a thing as too much trust, as well as too little. A plausible objective of public policy, then, is not to maximise trust among consumers of financial services, but to maximise trustworthiness among its producers.