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Americans' confidence in banks remains low, poll says

November 01, 2010

By Barbara Marquand | Money Rates Columnist

Just as interest rates on money market and savings accounts show little sign of improving, Americans' confidence in banks remains stubbornly low.

Less than a quarter of Americans, 23 percent, say they have a "great deal" or "quite a lot" of confidence in U.S. banks. This figure is about the same as last year, but well below the 41 percent who held banks in high esteem in June 2007 before the recession settled in, according to a recent Gallup Poll.

This lack of confidence is a far cry from attitudes about banks when Gallup started doing the poll in 1979. At that time, 60 percent of Americans said they had a great deal or quite a lot of confidence in banks. This year about a third of respondents, 30 percent, said they had very little or no confidence in banks, the second year in a row when the number of people with low opinions outnumbered those with favorable views about banks.

Confidence in banks worst in the West

Confidence in banks has fallen throughout the country, with the largest declines in the West, where the recession has pummeled the housing market in states, such as Nevada, Arizona and California. Only 17 percent of respondents had a great deal or quite a lot of confidence in banks in the West, compared to 27 percent in the South, 25 percent in the East and 20 percent in the Midwest.

Still, Americans' confidence levels in banks is greater than that in Congress, HMOs, big business and organized labor, Gallup notes.

This poll was conducted before the massive financial regulatory reform bill was passed, and it's unclear how the changing regulatory environment might impact people's opinions of the banking system. A strong financial system is a key to economic recovery and eventual improvement in money market account and other savings account rates.

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