(AGENPARL) – Thu 29 January 2026 Soft power and central banks
Paolo Angelini
Deputy Governor of Banca d’Italia
Opening Remarks at the 7th Soft Power Conference
Banca d’Italia, Ciampi Auditorium
Rome, 29 January 2026
Ladies and Gentlemen,
Distinguished Guests,
It is my great pleasure to welcome you to Banca d’Italia for the seventh edition of the
Soft Power Conference. First of all, I would like to thank the speakers for their contribution
to today’s debate, and the Soft Power Club for fostering a space where diplomacy, culture,
and economics meet for informed and constructive dialogue.
More than three decades ago, Joseph Nye defined soft power as the ability to shape
the preferences of others not through coercion or payment, but through attraction and
persuasion.
Today, this notion appears to be losing ground. Countries are increasingly turning to
hard power – brute force and economic pressure – with often dramatic consequences.
The international order is under growing strain. Conflicts, rising geopolitical tensions, the
fragmentation of global trade, and rising protectionism challenge the foundations on
which decades of prosperity were built. Escalating conflicts continue to exact a heavy toll
on people around the world, while cyber warfare is also on the rise. Overall, the world’s
willingness to cooperate is at its lowest level in several decades.
Yet soft power – rooted in dialogue and persuasion – is more needed than ever, even as
it becomes harder to sustain, amid polarization and information overload.
Today’s event features an analytical tool, the Global Soft Power Index, which will be
presented in a few moments. As the authors’ tentative evidence seems to suggest, soft
power is not just a matter of diplomatic prestige; it may also bring significant economic
benefits. These findings underscore something that central banks have long observed:
trust is a key economic asset. Credibility, predictability, and the ability to communicate
effectively are forms of soft power that influence how households, firms, and financial
investors take decisions. They shape expectations and, through them, the functioning of
the economy.
A central question of today’s discussion is how soft power can support and strengthen
the multilateral system. Given the state of world affairs I have just described, one might
be tempted to conclude that it cannot. Yet that conclusion would not be correct, not
entirely at least. Let me illustrate this with an example from the community of central
banks.
Within this community we experience the importance of international cooperation on
a daily basis. Dialogue at the technical level remains open through long‑standing fora
such as the International Monetary Fund and the World Bank, the Basel Committee on
Banking Supervision, the Bank for International Settlements, and the Financial Stability
Board – a body that also includes government representatives. These fora have a long
tradition of reaching agreement through dialogue and compromise. Today, dialogue
continues not only on traditional issues, such as financial stability or the regulation of
digital innovation, but also on highly contentious ones.
Even on the topic of climate-related risks, a way forward is gradually being found. I will
not deny that difficulties have arisen. Yet discussion has allowed progress to be made,
at least in certain areas. Specifically, we have agreed that a focus on physical risk for
the purposes of financial stability and the supervision of financial intermediaries is
appropriate. This outcome is far from optimal in the eyes of many of us, but it allows the
community of central banks and supervisors to move forward with a pragmatic agenda
at a difficult juncture. Even more importantly, it enables us to keep the dialogue open.
Ultimately, this is an investment in soft power: the glue that binds cooperation, and the
force that sustains dialogue even when interests diverge.
To conclude, as Pope Leo XIV recently put it, ‘If you want peace, prepare institutions
of peace’. This is precisely why soft power – and the quiet political and technical work
that sustains it – matters so much. It is earned through credible institutions, responsible
leadership, and consistent action. It grows when countries invest in education, culture,
and innovation, and when nations engage constructively in dialogue with one another.
I am confident that today’s discussion, along with the insights of our distinguished
speakers, will contribute meaningfully to this collective effort. Thank you, and I wish you
all a productive and inspiring conference.
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