Two years after the collapse of Lehman Brothers in 2008, the chiefs of the world’s most powerful regulatory bodies met in Basel, Switzerland to agree new standards for banking institutions. These included requirements for banks to hold much greater capital reserves to protect against future ‘credit crunches‘ – and while banks were this week given four extra years to raise these reserves, critics say the effect of these measures will be to reduce their ability to lend.
However, GlobeScan’s most recent opinion polling shows that the global public strongly backs tighter regulation of the banking industry, particularly in the developed world. Respect for banking institutions is now well into negative territory in each of the developed nations we poll, and the balance of opinion in these countries clearly favours tighter banking regulation. The picture is different in the developing world, where net respect stands at over 50 per cent in Indonesia, Nigeria and Kenya, and where the proportions saying there is insufficient regulation are significantly lower.
The global consensus clearly sees government as bearing the primary responsibility for restoring stability to the financial system. Ironically though, despite the lack of trust in the banking industry in the world’s major industrialised economies, there is a greater tendency in these countries to look to the private sector to play a role in getting the system back on an even keel. Citizens in Western nations like the US, UK, Australia and Canada are among the most likely to feel that the private sector is also a key protagonist. This may reflect broader attitudes towards the role of government in the English speaking world – attitudes in Germany differ sharply – but suggests that banks need to be seen to be doing more than they currently are to put their own houses in order, or risk a further catastrophic erosion of public confidence.
Finding from the GlobeScan Radar, Wave 2, 2012
This post was written by former GlobeScan Research Director, Sam Mountford.
Developed nations looking to banks to do more to help mend the global financial system
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