Financial stability and public confidence in banks
Chernykh, Lucy; Davydov, Denis; Sihvonen, Jukka (19.02.2019)
JulkaisusarjaBOFIT Discussion Papers
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi:bof-201902211070
We use a novel, household opinions-based measure – Public Confidence in a Bank – to explore the role of bank-level and system-wide determinants of customers’ trust in banks. Our study covers a panel of approximately 260 large Russian commercial banks publicly monitored during 2010–2017. We find that public confidence in a bank is highly sensitive to the industry-level financial stability indicators, but less sensitive to bank-level risk characteristics. This result reveals an important role of overall banking sector stability in determining public perception of the safety and soundness of individual banks.
Published in Journal of Financial Stability Volume 69, December 2023, Article 101187, https://doi.org/10.1016/j.jfs.2023.101187