Trust and macroeconomic stability: a virtuous circle

Lecture by Mr Agustín Carstens, General Manager of the BIS, at the Center for Financial Studies, Goethe University, Frankfurt, 18 March 2024.

Trust is essential for the success of public policies. And it must exist across all areas of macro-financial policy – monetary, fiscal and financial stability – individually and as a group. Policymakers acquire trust by taking the necessary actions to achieve their policy objectives over time. Policymakers' success in dealing with recent crises was due in large part to the trust they had built over the years, which allowed them to take decisive action when required. But trust can be lost. That is why it is important for central banks to deliver price stability, fiscal policy to consolidate and supervisors and regulators to ensure financial stability. Building resilient and robust economies and financial systems is the best way to ensure that policies remain effective, so that they can be deployed when they are needed the most.