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The Death of Trust Across the U.S. Finance Industry

Author

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  • Limbach, Peter
  • Rau, P. Raghavendra
  • Schürmann, Henrik

Abstract

We document a significant decline in the level of generalized trust among finance professionals relative to the decline of trust in the general U.S. population. This decline occurs across all subsectors and at all hierarchy levels and is unique to the finance industry. It is related to a lack of confidence only in institutions that are relevant to the finance industry. The relative decline of trust is associated with a decreasing level of socialization among finance professionals as well as with changes in economic conditions and the professional environment in the finance industry.

Suggested Citation

  • Limbach, Peter & Rau, P. Raghavendra & Schürmann, Henrik, 2020. "The Death of Trust Across the U.S. Finance Industry," CFR Working Papers 20-05, University of Cologne, Centre for Financial Research (CFR), revised 2020.
    • Handle: RePEc:zbw:cfrwps:2005
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    File URL: https://www.econstor.eu/bitstream/10419/228629/1/cfr-20-05rev.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Finance industry; Generalized trust; Implicit incentives; Professional environment; Socialization;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics

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