Five years post-Lehman, top banks still face trust deficit: Survey

PTI Mumbai | Updated on October 20, 2013 Published on October 20, 2013

Five years after the fall of the mighty Lehman Brothers, the world’s confidence in the top 50 banks continue to remain negative, except in Asia, according to a global survey.

“Financial metrics of the world’s top 50 banks and financial institutions indicate increased confidence in the sector, but regulatory activity shows no sign of abating. But they still don’t instil confidence, which is negative at the end of the third quarter (of 2013),” Thomson Reuters said in a survey based on analysis of news and social media sentiment.

According to Thomson Reuters’ trust index metrics, Q3 saw a continuation of several trends observed in the year such as a steady improvement in sentiment in news and social media, continued confidence in analyst expectations for the sector, and an acceleration of regulatory activity.

“While social media sentiment analysis shows trust is still negative for the quarter, for the first time since January, European financials have moved higher than US financials, reflecting mortgage scandals in US and increasing confidence in Britain and European institutions,” said Thomson Reuters President (Financial & Risk) David Craig said.

He, however, said the ongoing monitoring of key metrics on trust in the global financial industry reveals that five years post-credit crisis, financial institutions are stronger, more stable.

Tracking trust through news and social media sentiment revealed a score of – 1.5 per cent for the top 50 global financial institutions in Q3, at the same level as in the second quarter, Craig said.

However, on a regional level, there continues to be subtle but important shifts. The institutions in Europe/UK saw modest third quarter improvement in trust sentiment from – 1.5 per cent to –1 per cent, and are now on par with the Asian institutions which have led in trust scores for virtually all of 2013 at –1 per cent for both quarters.

At —1.6 per cent, the institutions in North America were flat for the quarter, but had the lowest levels of confidence overall.

In Asia, concerns about the strength of the economy and shadow banking in China appear to have the greatest impact on overall trust sentiment for banks in the region, he said.

On the regulatory side, the report said there was increased regulatory activity.

Published on October 20, 2013
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