Americans are showing an increased level of distrust of the nation's financial systems, according to the new Chicago Booth/Kellogg School Financial Trust Index, compiled by the University of Chicago Booth School of Business and the Kellogg School of Management at Northwestern University.
According to the index, trust in banks has fallen to 33% since June, when the index recorded a 39% trust level. The researchers noted a disparity in trust between national banks (26%) and banks in which the government has a stake (22%) versus local banks (55%) and credit unions (56%).
Furthermore, Americans have their doubts about Wall Street: 55% of respondents polled by the index said they believe a significant stock market drop is likely – the highest level since the first issue of the index in December 2008.
On the housing front, 33% of those polled felt that house prices will drop in the next 12 months – the highest since March 2009 and an increase of three percentage points compared to three months ago.
‘Only 23 percent of those surveyed say they trust the country's financial systems, down from 25 percent in our last report in June 2011,’ says Luigi Zingales, the Robert R. McCormack Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business and co-author of the Financial Trust Index, ‘Also, nearly 60 percent of respondents in our survey said they are angry or very angry about the current economic situation – the highest level of anger we've found since the earliest months of the financial crisis. The findings in this issue reflect what's been reported in the news and demonstrate the fragility of trust many Americans still have in the institutions where they invest their money.’