Credibility is the ‘rational emotion’ well known as managerial jargon. Trust or distrust is an influence though rarely mentioned. The finance sector often asks if a central bank or treasury is credible. Who asks this and who wins the answers are my questions. Emotion-laden conflicts and their outcomes motivate booms and busts, this book argues. Credibility in finance is never a fixed ‘thing’. It is a demand for an organisation to stay ‘believable’ into the future, but about what? Perhaps central bank policy gives predictability, a sense of certainty to peak decisions in banks, or in businesses. It might give reliability to citizens and public assurance that policies can temper the excesses in money creation/destruction, to keep economic life reasonably steady. Types of credibility may be mutually exclusive.

Government money management compromises its public duties if too aloof from electorates; or, I show, if too fearful of ‘markets’ aka banks. Credibility demands surely are about conflicting hopes for control. These hopes drove the conflicts in the late 1970s in Anglo-America, conflicts that ended in sinking the full employment remit of the Fed and RBA, to embrace the hard or ‘sound’ money remit. Thereafter, no ‘tension’ existed between the two decent aims of price stability and full employment. Forget citizens, firms and jobs.