Financial stability and public confidence in banks

Lucy Chernykh, Denis Davydov, Jukka Sihvonen

Research output: Book/ReportCommissioned report

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
Publication statusPublished - 19.02.2019
MoE publication typeD4 Published development or research report or study

Publication series

NameBOFIT Discussion Papers
PublisherBank of Finland
ISSN (Print)1456-5889

Keywords

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

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