Trust in banks

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Title: Trust in banks
Author: Fungáčová, Zuzana ; Hasan, Iftekhar ; Weill, Laurent
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 7/2016
Year of publication: 2016
Publication date: 13.5.2016
Published in: Published in Journal of Economic Behavior and Organization, 157, January, 2019, 452-476
Pages: 45
Subject (yso): pankkiala; pankkipalvelut; instituutiot; luottamus; uskonto (uskominen)
Keywords: Bofit-kokoelma;
JEL: G21; O16; Z1
Other keywords: banking; trust; institutions; religion
Abstract: ​Trust in banks is considered essential for an effective financial system, yet little is known about what determines trust in banks. Only a handful of single-country studies discuss the topic, so this paper aims to fill the gap by providing a cross-country analysis on the level and determinants of trust in banks. Using World Values Survey data covering 52 countries during the period 2010–2014, we observe large cross-country differences in trust in banks and confirm the influence of several sociodemographic indicators. Our main findings include: women tend to trust banks more than men; trust in banks tends to increase with income, but decrease with age and education; access to television enhances trust, while internet access erodes trust; and religious, political, and economic values may affect trust in banks. Notably, religious individuals tend to put greater trust in banks, but differences are observed across denominations. The holding of pro-market economic views is also associated with greater trust in banks.

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