Who can be trusted after the financial crisis?

Just found a great paper by the Centre for European Policy Studies (CEPS) titled: "Who can be trusted after the financial crisis?"

Using extensive research across the EU, Commission, ECB and more, they draw four main conclusions:

"First, our analysis of the impact of the financial crisis on confidence in the European institutions shows a severe decrease in citizens’ trust in the immediate aftermath of the financial crisis with a slight recovery nine month later. In particular citizens’ net trust in the ECB hit an historical low point in the aftermath of the financial crisis with a majority of people distrusting the ECB.

"Second, the trend in confidence in European institutions is diametrically opposed to citizens’ confidence in the national government and parliament. When citizens’ confidence in the European institutions decreased in the immediate aftermath of the crisis, confidence in the national government actually increased. When the confidence in European institutions recovered nine months later, confidence in the national government decreased. However, not all data support this conclusion. Data from the Edelman Trust Barometer suggest a continuous increase in the confidence in the government.

"Third, our analysis of confidence in business and citizens’ confidence in banks and stock markets produces ambiguous results. Whereas citizens’ confidence in stock markets and business confidence has recovered in most countries, confidence in banks has deteriorated nine month after the crisis.

"Fourth, confidence levels in free market economies seem to have dropped in a majority of countries nine month after the crisis. Only in the German case could one actually detect an increase in confidence in the free market economy. However, separate data sources show that levels of net confidence in the free market economy in the US remain significantly higher than in the two European economies Germany and France.

"Given that in particular in France and Germany a decrease in net confidence is associated with an increase in citizens’ demands for stronger state support and that German and French citizens have the highest level of anticapitalist sentiments, French and German governments will have to invest more effort in trust enhancing policies.

"Nevertheless, one has to highlight that the financial crisis also had a deep impact on the US economy as citizens’ demand for stronger state regulation has risen immensely and has almost reached European levels."

The complete report can be downloaded for free (53 page pdf).

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