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Financial knowledge and trust in financial institutions

Author

Listed:
  • Carin van der Cruijsen
  • Jakob de Haan
  • Ria Roerink

Abstract

Using fourteen years of data on Dutch consumers' trust in financial institutions, we find that financially literate consumers are more likely to trust banks, insurance companies and pension funds, and the competence and integrity of the managers of these institutions. This holds both for broad-scope and narrow-scope trust. Although trust in respondents' own financial institutions is significantly higher than general trust in financial institutions, both forms of trust are positively related. Financially knowledgeable people are more likely to trust the prudential supervisor. Finally, our results indicate that trust in the supervisor is positively related to trust in the financial sector.

Suggested Citation

  • Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2019. "Financial knowledge and trust in financial institutions," DNB Working Papers 662, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:662
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    File URL: https://www.dnb.nl/en/binaries/Working%20paper%20No.%20662_tcm47-386893.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Carin van der Cruijsen & Jakob de Haan & Ria Roerink, 2020. "Trust in financial institutions: A survey," DNB Working Papers 693, Netherlands Central Bank, Research Department.
    2. Michiel Bijlsma & Carin van der Cruijsen & Nicole Jonker, 2020. "Consumer propensity to adopt PSD2 services: trust for sale?," DNB Working Papers 671, Netherlands Central Bank, Research Department.

    More about this item

    Keywords

    trust; financial institutions; financial literacy; consumer survey;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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