The percentage of Americans saying they have a "great deal" or "quite a lot" of confidence in U.S. banks stands at 18%, continuing a trend of low confidence recorded throughout the economic downturn.What Does "Confidence in Banks" Mean?
In the same survey, 6 in 10 Americans express confidence in their main or primary bank, defined as the place where they do most of their banking business.
Confidence in U.S. Banks Remains Fragile
Gallup data show that the reputation of America's banks continues to suffer from the fallout of the financial crisis and bank bailout. On the other hand, bankers should take some solace in that the majority of their customers have a positive view of the place where they do most of their banking.
Confidence can mean many different things. For example, I am quite confident a huge percentage of banks are insolvent.
I am also confident the vast majority of banks are hiding bad housing loans, bad commercial real estate loans, and have not properly marked-to-market probable credit card losses. Moreover, I am confident that large banks, especially Citigroup, are still hiding hundreds of billions of garbage in off-the-book SIVs.
Sadly, the Fed is not just turning a blind eye to such behavior, but encouraging it.
To help pay for hidden and pending losses, I am confident that banks will raise fees as much as much as permitted by law to nickel and dime customers to death.
To balance this mess out, I am quite confident that FDIC will be honored, no matter what it takes.
Finally, I am confident that interest rates banks offered by banks will stay low because the Fed is going to keep short-term rates as low as he can for as long as he can, to help insolvent banks slowly recapitalize over time.
Whether or not this is "confidence inspiring" or not is certainly subject to a vast amount of subjective interpretation.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List
No comments:
Post a Comment