Posted on Tuesday, January 25, 2011
A recent report by the Chicago Booth/Kellogg School shows around 26 percent of Americans have faith in America’s financial system.
And though that number doesn’t seem to be that impressive, it is, says the Financial Trust Index, which was released Monday. In January 2009, when the Chicago Booth/Kellogg School began surveying trust in the financial system, only 20 percent of Americans said they trusted the financial system.
Though faith in the financial system overall is on the rise, the index also shows that homeowners have “lingering discontent” with mortgage lenders. The index reported that 48 percent of people who say they’re morally opposed to strategic default also said they would be more likely to
default on their mortgage if they knew their lender or bank had been accused of predatory lending.
When examining the stock market, the authors of the index found 21 percent of people surveyed wanted to increase their investments in the market, up from 14 percent of the people surveyed in September 2010.
The Financial Trust Index measures American’s trust in the Financial System every quarter.
Trust in banks has risen to 43 percent from its lowest point of 33 percent. And while 58 percent of homeowners said they believed lenders would pursue those who default on their mortgages, 11 percent said they’d be more likely to walk away from their loan if their bank or lender used false or faulty documentation in foreclosure proceedings.
The only area that the index has seen less than encouraging results is with job security.
“[T]he one area where we’ve continued to see a lack of confidence is in employment and job security,” said Paola Sapienza, professor of Finance at the Kellogg School, and co-author of the study.
“People surveyed reported a 1 in 4 chance that they could lose their job in the next 12 months. This figure has remained constant over the full two years of the Financial Trust Index, which suggests that the growing optimism about the health of the economy has not yet trickled down to attitudes toward the job market.”
By: Joy Leopold DS News