Americans More Trusting of the Financial Industry

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Americans' trust in the financial industry has reached a new high -- since 2008 anyway, when the Chicago Booth/Kellogg School created its Financial Trust Index. Obviously, it hasn't had very much room to decline during that time period. Since the financial crisis, banking, stocks, and the rest of the market has slowly begun to heal. Still, it's notable that, despite a relatively weak second quarter, Americans are feeling better about finance.

Here's how trust has changed, according to the latest report:

financial trust 2010-06.PNG

As you can see, views of banks haven't gotten much better since late last year, but the other categories have all improved.

More Americans plan on investing in stocks:

financial investment 2010-06.PNG

While a 3% pop in the number of people wanting to invest to a measly 17% won't excite stock brokers too much, they'll probably take what they can get at this point. The Dow Jones Industrial Average was down 11% last quarter.

Americans are less bullish about real estate, however. In fact, fewer believe prices will increase in the next 12 months:

financial house prices 2010-06.PNG

The 5% drop in those who expect prices to increase is pretty significant. But Americans don't appear to be terribly bearish either: fewer also believe that prices will decline.

Finally, Americans still broadly favor more government intervention in the financial markets. A majority want to see executive compensation capped, more financial regulation, and pressure on corporations to improve:

financial government intervention 2010-06.PNG

Interestingly, the report notes that the June survey was conducted as the Dodd-Frank Bill was near approval. In other words, Americans may want even more financial regulation than the legislation provided. That either means that they want stricter controls over the financial industry or different rules from what Dodd-Frank imposed.

In any case, it's not particularly surprising to see financial trust slowly and steadily improving. It still has a long way to go, however.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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