Top 50 Global Financial Firms - Trust (TR) Or The Guillotine (FT)?

Posted: Jan 17 2014, 12:11pm CST | by


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Trust in global financial institutions has improved but still remains negatives, according to a Thomson Reuters survey of news and social media. Its proprietary TRust Index showed “trust sentiment in the top 50 global financial institutions finished the year stronger, but still negative, with fourth-quarter sentiment below that of the third quarter.” The TRust Index uses proprietary data analysis plus news and social media analysis, drawing on more than four million business, financial news and media sources to track the state of trust in the top 50 global financial institutions.

The Thomson Reuters report came out too soon to catch Philip Stephens in today’s FT.

“It is time to admit defeat,” he begins.  “The bankers have got away with it. They have seen off politicians, regulators and angry citizens alike to stroll triumphant from the ruins of the great crash. Some thought the shock of 2008 might change things. We were fools. Bankers are still collecting multimillion-dollar bonuses even as they shrug off multibillion-dollar fines.”

“Yet it is truly extraordinary that the reign of the bankers has carried on uninterrupted,” he concludes. “Like monarchs of old, they have accepted some constraints, but these can be worn away over time. Their power and riches are largely untouched. Whatever happened, I sometimes wonder, to Robespierre’s guillotine?”

Thomson Reuters found a more benign view of bankers. David Craig, president for financial and risk at the firm, said trust sentiment has recovered, albeit modestly, from 2012.

The firm also predicts that growth in financials will be strong, trailing only telecommunications. ..”At 22.4 percent earnings growth estimates for the sector, financials are just below telecommunications companies this quarter at 22.6 percent, but still well ahead of all other S&P 500 sectors,” said Sridharan Raman, senior research analyst.

Commenting on the lackluster results from Goldman and Citi, Mike Mayo, a leading US banking analyst, said that he thinks investors are long on hope, optimism not backed by evidence.  “We’ll see whether it pans out or not,” he told the FT today.

Rather cautiously, Thomson Reuters notes “a high level of controversies reported for the Top 50 global financials, but adds that “adoption of processes and governance to address responsible marketing practices, improve fair competition and avoid bribery and corruption all continue to be priorities.”

I guess we will see whether that pans out, or not.

Source: Forbes

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