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A brand new survey shows the negativity Americans feel toward the United States economic system continues to grow. Seventy-seven percent of those interviewed said they no longer have trust in the financial system. But regulators can rebuild some of that confidence with work, experts say. But consumers also need to be financially literate to monitor the program. Article source: Over three-fourths of Americans distrust financial system

Decrease from June of 2 percent

The latest figures from the quarterly Chicago Booth/Kellogg School Financial Trust Index are down to 23 percent who trust the financial system from June's figure of 25 percent. Community trust in banks, mutual funds, corporations and the stock market are measured in the survey.

Author Luigi Zingales said:

"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."

Might have guessed people don’t trust banks

In June, bank trust was at 39 percent while it is now at 33 percent. Major lenders were where much of the trust issues lay. In fact, over half which were interviewed trusted credit unions and local banks much more.

Not trusting the government

Politics plays an enormous part in the financial system, as explained by author Paola Sapienza.

A query debating job creation over deficit reduction was asked to half of those questioned. Of those that answered, two-thirds believed it should. The other half of subjects got a different question. The query was, “Do you agree with Obama that a government effort to create brand new jobs should take priority over a debt reduction?” When the President's name was used to preface the query, the support for jobs creation decreased considerably. It went down 10 percent for republicans. A fairly big dip was also shown by Democrats. It showed a 5 percent drop.

How confidence will be brought back

Regulators can still work on rebuilding trust, according to UPI, Dennis Lockhart who is president of the Atlanta Federal Reserve Bank said

"Collectively, the community of regulators must judiciously supervise individual institutions and vigilantly monitor the health of the overall system, to guard the public trust and, above all, avoid a systemic crisis."

Customers play a role

According to Lockhart, the public is accountable as well. It has to know enough about finances to know if services are good or not. Lockhart said:

"We learned over the last decade that the lack of financial literacy in our citizenry imperils the system, and failings of high-level supervisors and managers can result in considerable harm to the economy and the general public."

Articles cited

Daily Finance

UPI

Chicago Booth/Kellogg School

Chicago Booth/Kellogg School