Stock Market and Large Corporations Least Trusted Financial Institutions

May 7th, 2012
in econ_news

Econintersect:  The Chicago Booth/Kellogg School Financial Trust Index (FTI), a joint project of the business schools at the University of Chicago and Northwestern trust-in-othersSMALLUniversity, reported on 2 May 2012 that fear of a stock market drop is decreasing.  After a three-year bull market that has seen many broad U.S. stock  market indexes nearly double, memories of the colossal decline from October 2007 to March 2009 are beginning to fade.  However, overall trust in the stock market as a financial system element has declined marginally to 15% in the latest poll.  Of the components in the FTI, the lowest trust was engendered by large corporations, ranking just below trust in the stock market.

Follow up:

Curiously, trust in mutual funds (30%) was almost double the 15% trust in the stock market.   And, another curiosity is that trust in banks (32%) is more than double the trust in large corporations (14%).  The data comparisons are for June 20122.

Here are graphics from the latest FTI report:




Some other observations and results include:

  • Economists (78%) believe the bank bailout has reduced employment losses while only 43% of the general public so believes.
  • Economists (80%) believe the stimulus reduced employment losses while only 46% of the public believes that.
  • Economists (46%) and the public (43%) have similar beliefs that the stimulus benefits will ultimately outweigh the costs.
  • Only 32% of “experts” believe executives are overpaid while 67% of the public so believes.
  • While 64% of the public believes higher gasoline taxes are better than mandated mileage standards to reduce carbon-dioxide emissions, 90% of the “experts” believes that is the case.

The results of the FTI polls have some significant differences from polling results from those reported by Gallup on confidence in institutions.

Editorial note: What answers you get depends on who you ask and how you ask it.  Public sampling procedures used by the two polls and the wording/context of the questions may account for the apparent differences in results.


John Lounsbury


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