Financial stability and public confidence in banks

Jukka Sihvonen, Lucy Chernykh, Denis Davydov

Research output: Working paperDiscussion paperScientific

Abstract

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.
Original languageEnglish
PublisherBank of Finland
ISBN (Electronic)978-952-323-262-4
Publication statusPublished - 2019
MoE publication typeD4 Published development or research report or study

Publication series

NameBOFIT Discussion Papers

Keywords

  • financial stability
  • public confidence
  • bank failures
  • customer opinions
  • online reviews

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