|[October 23, 2013]
Chicago Booth/Kellogg School Financial Trust Index Holds Steady, September Survey Also Reveals Public Sentiment on Federal Reserve
CHICAGO --(Business Wire)--
Americans are feeling pretty positive about places they can put their
money according to the latest data from the Chicago Booth/Kellogg School Financial
"The Financial Trust Index is holding steady, in line with stable
expectations about future housing prices and stock market performance,"
says co-author Luigi
Zingales, the Robert C. McCormack Professor of Entrepreneurship and
Finance and the David G. Booth Faculty Fellow of the University
of Chicago Booth School of Business.
The quarterly survey-which has been tracking trust across key financial
institutions for the last five years-expanded its scope for this 20th
report to include sentiment about the Federal Reserve, including
outgoing chai, Ben Bernanke. Co-author Paola Sapienza, the Merrill
Lynch Capital Markets Research professor of finance at the Kellogg
School of Management at Northwestern University reports, "We found
that 56 percent of respondents were favorable to Bernanke's performance
as chairman of the Federal Reserve-eight percent were very favorable, in
fact-while 17 percent were very unfavorable."
The survey was done at the end of September, just prior to President
Obama's nomination on October 9, 2013, of Janet Yellen to take over the
post. With Bernanke's term coming to a close, Zingales says, "We asked a
survey subset-727 respondents who said they're familiar with Fed
policy-about the most important characteristics a new Fed chairperson
should have. The two most important qualities they cited were
'Credibility' (42 percent of respondents) and the 'Ability to foresee
economic trends' (41 percent)."
While only one percent of respondents chose 'Honesty/Integrity' as
essential for the next leader of the Federal Reserve, Zingales points
out, "This doesn't necessarily mean the public doesn't value honesty.
But rather, in light of the jolts to the financial world in recent
years, people may feel that it's paramount that the next Fed chair be
credible and able to accurately predict economic trends."
Regarding broader impacts on the economy, Sapienza explains, "Within
this group familiar with Fed policies, 63 percent are concerned that
current Fed strategy will lead to higher inflation, while 30 percent do
not share that concern." When asked about Fed performance in regulating
banks, Sapienza says that within this same subset, "58 percent think the
Federal Reserve has been too lenient, 30 percent said it was just about
right, and the remaining 12 percent believe the Fed's been too tough."
The Chicago Booth/Kellogg School Financial Trust Index is a
quarterly measure of public opinion tracking attitudes toward financial
institutions-banks, credit unions, the stock market, mutual funds,
insurance companies and large corporations. The data provides a gauge of
how much trust Americans have in the places they can invest their money.
ABOUT THE SURVEY: The survey was conducted for the Financial
Trust Index by Social Science Research Solutions (www.ssrs.com),
an independent research company, from September 19, 2013 to September
26, 2013, via telephone. A total of 1,027 individuals who make household
financial decisions were interviewed, with a margin of error for total
respondents of +/-3.46 % at the 95% confidence level.
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