University of Amsterdam, June 25-27, 2013
Proposal for the Paper: “Genesis and Persistence of Trust in Banks – a Transatlantic Approach”
Prof. Dr. Rolf v. Lüde
Universität Hamburg
Fakultät Wirtschafts- und Sozialwissenschaften
Fb Sozialwissenschaften – Institut für Soziologie
Allende-Platz 1, D-20146 Hamburg
Fon: +49 (0) 40 - 42838 3831
Rolf.Luede@wiso.uni-hamburg.de
Abstract
Against the background of the ongoing European financial crisis an underlying but nevertheless defining level of analysis comes into focus: trust (or confidence) in banks. Concerned with that side of the crisis the paper takes up the somewhat astonishing aspect of ongoing customer loyalty of private investors towards their housebanks. Here, we are confronted with the dynamic process of the genesis and persistence of trust in financial institutions. In addition to the presentation of relevant theoretical groundwork to the question of “institutional” trust by referring to essential authors like Luhmann, Shapiro, and Zucker the paper engages in a historical perspective taking into account typically German saving behavior as well as a detailed analysis of the trust-building qualities of the German banking sector. It is this theoretical analysis that presents trust as a counteragent to contingency. If crisis expresses itself in amplified contingency, then trust is the essential sealant to take into account – and that somehow is conserved in social structures. The main conclusions of the paper consider the banking systems on both sides of the Atlantic to provide insight into the defining characteristics of a Continental European Saving Behavior against the background of its historically developed institutional structure. They are as follows: First, market-based financial systems and bank-based financial systems differ with respect to the type of trust-guarding institutions which prevail in either system – in the German bank-based financial system cooperative arrangements lead to banking associations as well as close relationships between banks and the industry that have come to play an important trust-granting role. Second, a profound trust in the banks’ superiority in handling risks has made the typical German household a ‘lazy’ manager of its own wealth. Finally, a ‘culturally inherited’ robust belief still (unconsciously) guides the investment behavior of private investors and so adds to the explanation of the persistence of trust on the level of cultural embeddedness.
