The Critical Role of Soft Power in Central Banking

At the 7th Soft Power Conference in Rome, Paolo Angelini, Deputy Governor of the Bank of Italy, addressed the evolving significance of soft power in an increasingly fragmented global landscape.

Angelini highlighted that while the world faces escalating conflicts, geopolitical tensions, and rising protectionism, the concept of soft power—defined by persuasion and attraction rather than coercion—remains vital but increasingly challenged. He pointed out that international willingness to cooperate has reached a historic low, yet the economic and institutional advantages of soft power are more important than ever. The discussion also introduced the Global Soft Power Index, which suggests soft power can yield substantial economic benefits, echoing the long-held view among central banks that trust, credibility, and effective communication are essential components of economic stability. Angelini provided examples from the central banking community, emphasizing that dialogue and compromise remain fundamental practices through organizations such as the International Monetary Fund, Bank for International Settlements, and other global financial bodies. Despite fierce disagreements, especially around climate-related financial risks, ongoing dialogue allows for gradual progress and pragmatic solutions, ultimately reaffirming the indispensability of cooperation and trust.

This address underscores that in times of heightened division, the quiet yet persistent cultivation of soft power through credible institutions and international engagement forms the backbone of resilient and peaceful global finance.