1/10/17

I was reading this article on The Atlantic in which a finance professor from Booth opined that academic economists' views on the financial sector are too rosy in comparison to the public's mistrust. What is more important and surprising is that the 2016 dated surveys mentioned in the article show that a large number of public are distrustful of the banking sector.

A survey last December found that nearly half of Americans think that the financial system hurts the economy. Even among readers of The Economist--where bankers presumably have home-field advantage--a poll found that 57 percent disagreed with the statement that "financial innovation boosts economic growth.

A considerable amount of time has passed since the financial recession and the economy looks stable now. What does it take for a regular American citizen to start believing the financial industry and look at it as a constructive force rather than a destructive one?

Comments (20)

1/9/17

The whole Wells Fargo thing probably knocked it back a bit.

Financial Modeling

1/9/17

I doubt ever. Many people, regardless of if Wall Street cleans up its image, will get past the compensation. How can I truck driver from Georgia trust a guy making millions a year.

1/9/17

Everyone hates lawyers until they need one. Everyone hates bankers until they need one. Public opinion is worthless because it is based on the public. The financial sector is incredibly important in everyones life, but it isn't easy to understand.

1/10/17

That's exactly the key point why they don't trust it. Law and finance (in certain areas) are wrapped up in technical language and not enough transparency compared to other professions. Medicine used to be like this also but it changed.

Professionals are able to leverage this advantage to justify high salaries. The more transparency (increase of public knowledge) the lower high salaries can be justified, look at Asset Management.

Absolute truths don't exist... celebrated opinions do.

1/11/17

Interesting. Maybe, with increasing innovation in fintech and in the development of new business models, we may see finance achieve boosts in public perception.

"I told him (Mandela) was my uncle and he seemed to believe me, the ignorant fuck." - square_miles

1/11/17

Aka compensation go down

1/11/17

For trading, yes, if you are talking about old school stuff. Quants are just going to be wowed at, and then somebody might talk shit about them too at some point in time.
For advisory, I don't see comp going down any time soon. Advisory services have a tendency to shift blame to the company executives.

"I told him (Mandela) was my uncle and he seemed to believe me, the ignorant fuck." - square_miles

1/11/17

I disagree. People understand even less about tech than they do finance, but so far that opacity has worked in tech's favor. Right now, technology firms are the darling, until one day they are not. Wait until the day robo-advisors, virtual banks, or cryptocurrencies gain the type of scale equivalent to actual banks, and then have a scandal or programming error costing the public billions. Pitchforks will begin pointing the other way.

1/11/17
TNA:

Everyone hates lawyers until they need one. Everyone hates bankers until they need one. Public opinion is worthless because it is based on the public. The financial sector is incredibly important in everyone life, but it isn't easy to understand.

This. Everyone complains about gas prices until the industry produces too much and prices crash and then the public moves onto complaining about carbon emissions and global warming (not saying it isn't a problem).

To answer OPs questions its all about perception. America is turning more into France in that the public (being egged on by politicians hasn't helped) hates those that are rich and have what the general public does not.

Ask someone on Main Street how they imagine an investment banker and they probably conjure up an image a la Wall Street 1980s.

If Wall Street truly wanted to improve its image it has to focus more on helping the country. Investing in infrastructure projects, helping small businesses similar to the initiative GS has focused on to name some.

However so long as the media and politicians keeping blaming the big, bad banker and referencing The Big Short people that don't know better will keep hating bankers.

And frankly I don't think Wall Street should nor does give a damn...

Best Response
1/11/17

This may inadvertently uncover a fundamental problem: the average person will never need the services of an investment banker or similar Wall Street type, so they have no personal investment or experience to curb their emotional judgments

1/11/17

Well put

Absolute truths don't exist... celebrated opinions do.

1/11/17

+1 SB

...

1/16/17

I think a lot of it has to do with the decline of entrepreneurship and the public's turning away from the financial markets. You're not going to need a banker unless you have a business that needs financing/advisory, and you're not going to need an investment professional unless you have some kind of savings to invest. Most people nowadays have neither.

1/11/17

Banks have been hated since they existed, that will never change. It really doesn't matter though.

1/11/17

@BobTheBaker not entirely true. Small, regional banks I would argue are beloved by your common man because of the relationship and direct affect they have on small businesses and the middle class (i.e. Bank of Texas and BOK Financial probably has a much higher favorable rating than say Chase, Citi, or Wells Fargo).

1/11/17

No one cares what the public thinks and they shouldn't. The public opinion is completely worthless unless you're a politician. Finance has been hated forever and will forever be hated--that's just a fact--and everyone who hates it has their own little corner, either because of comp, because they are socialists, because they don't believe in the federal reserve system, etc. (and yes--this is as prevalent amongst Sanders-supporting socialist liberals as it is amongst Tea Party hard core conservatives.)

1/11/17

When they never figure out what bespoke tranche opportunity really is... Oh wait, fucking Big Short (movie)!

1/11/17

Hold up, don't feel so special.

Healthcare is hated for inefficiency, pharma is hated for pricing, pop culture is hated for it's shallowness, law is hated for its double-speak, tobacco is hated for its health risks, government is hated for everything-- hell, I hate my mechanic cuz the punk always tells me there's something broken on my car and there's no fiduciary standard to make sure he's actually giving me unbiased advice.

Welcome to capitalism, man.

1/11/17

Financial services attracts a lot of immoral pieces of shit IMO.

1/12/17
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