2019 Chicago Booth/Kellogg School Financial Trust Index increases from 27.6 percent to 33.3 percent, showing the highest level of financial trust from the American public since the Index started in 2008. The percentage of Americans dissatisfied with the current economy dropped from 27.3 percent in 2018 to 24.8 percent in 2019.
New data from the Financial Trust Index (FTI), which captures the level of trust that Americans have in institutions, reveals an all-time high level of public trust in financial organizations. Administered by the University of Chicago Booth School of Business and Northwestern University’s Kellogg School of Management, the study also reported an all-time low level of public dissatisfaction with the national economic landscape and a slight decrease in trust of the government.
Overall levels of public trust in financial institutions rose from 27.6 percent in 2018 to 33.3 percent in 2019—the highest measure of trust since the first wave of FTI data was collected in 2008. The growth was largely due to an increase of trust in mutual funds, the stock market and large corporations.
The Financial Trust Index captures the level of trust that Americans have in institutions. The study was conducted for the Financial Trust Index via telephone by SSRS, an independent research company. Interviews were conducted during the period of December 17–26, 2019, among financial decision-makers. A total of 1,019 interviews were conducted, with a margin of error for total respondents of +/-3.57 percent at the 95 percent confidence level.
Higher Trust in Corporations
For the first time, trust in large corporations rose above 20 percent. Although the results persist independently of the respondent’s political alignment, the rise was especially prominent among Democrats, whose trust in large corporations almost doubled, surging from 13.6 percent in 2018 to 24.5 percent in 2019.
Consistent Trust in Banks
Trust in banks remained consistent with last year, at 41 percent. Among the four different classifications of banks surveyed, credit unions and local banks remained the most trusted institutions, with both entities showing 58 percent. By contrast, trust in national banks and government-linked banks remained lower, at 38 percent and 25 percent, respectively.
Higher Overall Satisfaction with the Economy
The percentage of Americans who reported dissatisfaction with the current economy dropped from 27.3 percent in 2018 to 24.8 percent in 2019. Republican respondents reporting dissatisfaction rose slightly, from 17.5 percent to 18.1 percent, while the measure fell one percentage point to 32.6 percent among Democrats. Nevertheless, the percentage of respondents reporting no dissatisfaction remains high for Republicans (65.3 percent) and low for Democrats (30.5 percent).
Lower Trust in US Government.
Public trust in the US government decreased slightly to 21.5 percent. This decrease was prevalent in both political parties, with Republicans falling about four percentage points to 22.2 percent and Democrats falling about two percentage points to 20.2 percent.
About the Index:
The Financial Trust Index was created in 2008 as a means to study the changes in trust in the financial industry and its impact on investors’ decisions. The index monitors the annual level of Americans’ trust in institutions and regularly evaluates how current events, policy, and government intervention may affect it. The initiative is sponsored jointly by the University of Chicago Booth School of Business and the Kellogg School of Management at Northwestern University, and is administered by Social Science Research Solutions.
The Survey Lead Authors are Paola Sapienza and Luigi Zingales. Paola Sapienza is the Donald C. Clark/HSBC Chair in Consumer Finance Professor at the Kellogg School of Management at Northwestern University. Luigi Zingales is the Robert R. McCormack Distinguished Service Professor of Entrepreneurship and Finance at the University of Chicago Booth School of Business and one of the editors of this blog.
The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy.
