Confidence declines in 10 of 12 nations since economic downturn
WASHINGTON, D.C. -- Confidence in financial institutions fell significantly in 10 of 12 European countries Gallup surveyed between 2006 and 2008, prior to the global economic collapse, and again after the downturn last fall. The biggest declines were seen in Ireland, Romania, the United Kingdom, and Portugal. Only in Italy did confidence in banks and other financial organizations improve in 2009, compared with polling conducted prior to the onset of the global recession.
The drop in confidence was sharpest in Ireland. One in four Irish (25%) said they trust the financial institutions in their country in April, down from more than two-thirds (68%) a year before. Part of the decline may reflect an atmosphere of discontent surrounding the country's financial sector during the data collection period (April 17-27). Earlier that month, Ireland's government announced that it would spend billions of euros to guarantee bank loans in an attempt to stabilize the country's financial sector.
After Ireland, Romania, the United Kingdom, and Portugal saw the biggest declines; in each country, confidence in financial institutions dropped 20 percentage points or more between polling periods.
Trust in financial institutions actually increased in Italy, where lending practices tend to be more conservative when compared with other major European countries. This year, more than a third (35%) of Italians said they were confident -- a 10-point increase from 2008. Despite these gains, Italians' confidence in the financial sector is still among the lowest in this group of countries. Results from Cyprus did not change significantly.
In addition to the 12 countries discussed so far, Gallup surveyed in Iceland, Luxembourg, and Malta for the first time in late 2008 and early 2009. Adding these countries to the list and examining the latest results for all 15 European countries indicates that a median of 41% of those surveyed said they were confident in the financial institutions in their country, while a median of 51% said they were not confident.
Residents of several smaller euro-zone countries were most likely to express confidence in their banks and financial institutions, including at least two-thirds of respondents in Malta (73%), Luxembourg (70%), and Cyprus (66%). At 8%, Icelanders were the least likely to say they were confident in their financial institutions. By the end of 2008, Iceland's financial sector was in crisis. Three of its largest banks had collapsed and the country took out more than $10 billion in loans from foreign entities, including the International Monetary Fund, to stabilize the financial situation there.
Many economists believe that improving consumer confidence in the financial sector is key to reversing Europe's economic slide. Gallup surveys in the region reveal there is much work to be done in this area, and more in some countries than others. Throughout the region, governments and other entities have aggressively adopted policies meant to relieve the economic woes the crisis has caused, with many such efforts targeting the financial sector. Earlier this year, for example, the European Central Bank dedicated 60 billion euros to relieve banks of bond debt.
Meanwhile, European Union leaders continue to debate granting the EU greater regulatory powers over the financial sectors of its member countries. Such measures seek to strengthen the sector and improve overall confidence in financial institutions throughout the region. However, opponents remain skeptical that increased government involvement in the economy will prove fruitful.
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Results are based on telephone interviews with at least 500 adults, aged 15 and older, conducted in December 2008 in Iceland, January 2009 in Malta, December 2008-January 2009 in Luxembourg, and April-May 2009 in Slovenia and Cyprus. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error ranged from a low of ±5.1 percentage points in Malta to a high of ±5.7 percentage points in Luxembourg.
Results are based on telephone interviews with at least 1,000 adults, aged 15 and older, conducted in December 2008-January 2009 in Germany, September-October 2008 in Portugal, April 2009 in Ireland and Spain, and April-May 2009 in Italy, the United Kingdom, and France. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error ranged from a low of ±3.7 percentage points in Germany and the United Kingdom to a high of ±5.5 percentage points in Ireland.
Results are based on face-to-face interviews with at least 1,000 adults, aged 15 and older, conducted in March-April 2009 in Romania and December 2008-January 2009 in Poland and Hungary. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error ranged from a low of ±3.5 percentage points in Poland to a high of ±3.75 percentage points in Romania.
The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.