Central banks are meant to be trustworthy, predictable, and independent institutions essential for economic stability. Their effectiveness hinges on the trust of both public and private sectors. Untrustworthiness can arise from various macro and micro-level issues, such as unreliable policy execution, favouritism in crisis lending, and scandals.

This paper argues that central banks’ roles have expanded, as has the theory of institutional trustworthiness, yet these developments are often disconnected. By examining the Bank of England and the Bank of Chile, the paper highlights the need for better integration of trust-building theories and practices in central banking to enhance their evolving mandates.

Part of the Chandler Papers. Read more about the Chandler Sessions on Integrity and Corruption.