The Relevance of "Trust and Confidence" in Financial Markets to the Information Production Role of Banks
In: European journal of risk regulation: EJRR ; at the intersection of global law, science and policy, Band 11, Heft 3, S. 650-666
ISSN: 2190-8249
Banks are informational intermediaries whose efficient operation is strongly tied to the maintenance and continuance of the trust and confidence produced by them and by external sources. The literature on trust and confidence with relevance to banking has shown particular interest in their links with panics and bank runs, together with their wider resulting implications on the macro-stability of the financial system. However, on the micro level, an initial outcome emanating from a lack of trust and confidence would be the disruption of the information production that ultimately paves the way for further deterioration, leading to a vicious circle. To investigate this further, this article will shed light on this micro aspect of bank information production and its relationship with public trust and confidence.