and support the purchasing power of households, especially those on lower incomes. by laying the foundations for a more stable macroeconomic environment, monetary policy can thus help those policymakers that do have the power to create the conditions that improve the conditions for the most vulnerable. as i said in my letter to the minister for finance in advance of budget 2023, there is a role for fiscal policy in supporting those most vulnerable to the current high rate of inflation. however, supports should be temporary, tailored and targeted, to make the most of limited resources as well as limiting the risks of adding further to inflationary pressures. the current macroeconomic environment is unprecedented as we tighten monetary policy while facing a higher probability of a global recession. there are costs to firms and households in terms of raising rates with adverse implications for inequality. however, these factors have to be off - set against the costs of high inflation which if left untreated in a timely and effective manner, will have far greater macroeconomic consequences. that is why we at the ecb cannot allow ourselves to deviate from our primary objective, which is price stability. credibility and communication credibility is a key element of effective monetary policy. credibility and good communication go hand - in - hand. as i have outlined before, i believe transparency, honesty and engagement help to build credibility and to set expectations. trusting the central bank ’ s commitment to price stability, and understanding exactly how it plans to go about achieving it, influences the public ’ s ( and financial markets ’ ) inflation expectations. a lack of trust weakens the central bank and makes it vulnerable to political pressure. so central banks, like all institutions, need to build social capital. there are many definitions but i like to think of social capital as “ the social connections, attitudes and norms that contribute to societal wellbeing by promoting coordination and collaboration between people and groups in society ” 15. trust is stronger where social capital is strong. central banks can help build social capital through their actions but also through their communications. in uncertain times, such as we are living in today, this matters. the ecb will deliver on its mandate of price stability. our credibility is demonstrated by our monetary policy actions that are consistent with reaching our inflation target, and by communication that reiterates our objective and how we intend to achieve it. conclusion the distribution of income and wealth is something that central banks need to pay close attention to, not least because it has policy consequences as well as implications for social capital and

% of wealthy households accounted for almost half of this growth, the bottom 50 % accounted for 12 %, with the remainder of the increase related to the middle 40 % of households by wealth. chart 2. changes in net wealth across the distribution source : daly notes : wealth groupings are based on the net wealth distribution : the top 5 % of the distribution ( 95 % to 100 % ), the next 5 % of the distribution ( 90 % - 95 % ), the following middle 40 % ( 50 % to 90 % ) and the bottom 50 % of the distribution ( 0 % to 50 % ). approximately 80 % of the increase in the net wealth for the middle 40 % over this period can be attributed to increases in housing wealth ( chart 3 ), with the remainder a combination of growth in business wealth, deposits and other financial assets. housing wealth also represents a significant share ( 64 % ) of the increase for the top 10 %, though growing business wealth and financial assets are also important. with high levels of home - ownership in ireland ( 70 % ), it is not surprising that changes in asset values ( house prices ) and housing related debt ( mortgages ) play an outsized role in driving wealth inequality trends in ireland. 6 indeed, the fall in headline wealth inequality metrics since 2013 ( chart 4 ) can be largely attributed to the gradual decline in the proportion of households in negative equity since then, both via deleveraging, but also rising house prices. 7 chart 3. wealth structure & change along the net wealth distribution source : daly notes : other financial assets include debt securities, listed shares, investment fund shares, and life insurance and annuity entitlements, they do not include pension entitlements or currency given low comparability between the hfcs and qfa. business wealth includes financial business wealth ( unlisted shares and other equity ) and nonfinancial business wealth ( e. g. business property and land ) chart 4. wealth structure & change along the net wealth distribution source : daly ( 2022 ). notes : a gini coefficient of ‘ 0 ’ implies perfect equality ( i. e. where all households have the same level of wealth ), while a gini coefficient of ‘ 1 ’ expresses maximum inequality ( i. e. where one household holds all the wealth ). differences in the home - ownership rate can lead to differences in wealth inequality across countries. for example, wealth inequality as measured by the gini