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What drives trust in the financial sector supervisor? New empirical evidence

Working paper 750
Working Papers

Gepubliceerd: 13 september 2022

Abstract: Using a survey among more than 2,000 consumers in the Netherlands, we examine the drivers of trust in the financial sector supervisor. Trust in De Nederlandsche Bank (DNB) declined sharply during the financial crisis and has not yet completely recovered. Our results suggest that consumers’ knowledge about supervision is positively associated with their trust in the supervisor. Assessing the fitness and propriety of top managers of financial institutions and supervising financial institutions enlarge trust in DNB. The same holds for the execution of the deposit guarantee system. Finally, we find that communicating about supervisory activities also increases trust.

Keywords: Trust; financial sector supervisor; financial literacy; communication
JEL codes D12; D84; E58; G21

Working paper no. 750

750 - What drives trust in the financial sector supervisor? New empirical evidence

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Research highlights:

  • Using a survey among more than 2,000 consumers in the Netherlands, we research the drivers of trust in De Nederlandsche Bank (DNB).
  • Our research is among the first to examine trust in the financial sector supervisor.
  • We find that consumers’ knowledge about supervision is positively associated with their trust in the supervisor.
  • A wide range of tasks and responsibilities of DNB contribute to trust in the financial supervisor.
  • Trust in the financial supervisor might be enhanced by communicating about supervision and by enlarging public knowledge of supervisory tasks and responsibilities.

 

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