New York (Dec. 19, 2002) -- While the majority of executives think trust in financial institutions has eroded to a degree that requires structural change at the regulatory level, they aren't taking a leadership position on these issues, a study by PricewaterhouseCoopers reported.
The study polled senior executives, fund managers, investment associations, equity analysts, ratings agencies, bankers and insurers in the US, Europe and Asia. A copy of the poll is available at www.pwcglobal.com/financialservices.
According to the poll, 60 percent of respondents believe trust in financial institutions has eroded, and most believe that it has eroded to a degree that requires structural change at the regulatory level and within the institutions themselves. Eighty percent said failure to improve their own standards of corporate governance would result in a higher cost of capital, more volatile share prices or investors refusing to buy their stock. Just 2 percent believed they wouldn't be penalized by investors. Interestingly, more than half of the respondents said that the most intense pressure for improved governance is coming from investors and regulators, rather than their own management.
Almost two-thirds of European respondents and more than half of Asian respondents believed the adoption of a global set of generally accepted accounting standards would materially increase public trust in financial institutions, compared to 33 percent of U.S. respondents who believed such standards would have a significant effect.
"Financial institutions are in the frontline of the debate on trust and need to respond appropriately if they are to restore investor confidence in themselves, in the capital markets, and in the wider economy," said PwC partner Ian Dilks. "Our research suggests there is more to be done by the management of financial institutions if they are genuinely to play a leadership role in restoring public trust."
-- Electronic Accountant Newswire staff
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