According to Forbes Americans’ trust in the U.S. financial system fell in June
to its lowest point since March 2009, driven down by a notable drop in
confidence in big banks, according to the quarterly Chicago Booth/Kellogg
School Financial Trust Index.
Paola Sapienza, co-author of the index and the Merrill Lynch
Capital Markets Research professor of finance at the Kellogg School of
Management at Northwestern University, said researchers are “speculating” the
drop resulted from public concern over trading losses at JPMorgan Chase, which
came through the financial crisis with a reputation as Wall Street’s best
manager of financial risk. She noted that the 1,029 interviews,
conducted from June 20 to 28th, began the day after JP Morgan Chairman and CEO
Jamie Dimon testified before the House Financial Services Committee about
billions in losses caused by a trader known as the “London Whale”.
The spreading scandal over the manipulation of Libor (the
London Interbank Offered Rate that big banks in that city charge each other)
broke into public view on June 27th with the announcement that British bank
Barclays PLC would pay $450 million to U.S. and U.K. regulators to avoid
criminal charges. But Sapienza, noting that the survey’s questions are about
U.S. banks and most were conducted before the Barclays news, said that she
didn’t believe that disclosure played any role in the falling June
confidence. What if U.S. banks are implicated
in the manipulations? (Libor submissions by other banks, including Bank of
America, JPMorgan and Citigroup, are now being scrutinized.) “It’s quite
interesting to see what catches people’s imagination. It may be that Libor is
too technical,’’ Sapienza said.
Even as confidence in big banks has been falling, the
public’s trust in small ones has been climbing….
No comments:
Post a Comment