Financial Stability and Public Confidence in Banks

Lucy Chernykh*, Denis Davydov, Jukka Sihvonen

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review


We use a novel, household opinion-based measure – Public Confidence in a Bank – to explore the role of bank-level and industry-level determinants of retail customers’ trust in commercial banks. Our study tracks bank-month confidence measures during the 1/1/2010–1/1/2019 period in an unbalanced sample of 181 closely monitored large Russian banks that collectively account for the supermajority of the country's banking assets. We find that contrary to common expectations, public confidence in a bank is heavily driven by the industry-level financial stability indicators, while bank-level risk measures play only a minimal – or, at best, supplementary – role. This result reveals the important role of overall banking sector stability in determining public perception of the safety and soundness of individual banks and justifies the leading role of industry-level stability in ensuring trust in banks.

Original languageEnglish
Article number101187
Number of pages15
Early online date7 Oct 2023
Publication statusPublished - Dec 2023
MoE publication typeA1 Journal article-refereed


  • Bank risk, bank failures
  • Customer opinions
  • Financial stability
  • Online reviews
  • Public confidence


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