It’s been nearly six years since the bankruptcy of financial giant Lehman Brothers, an event that triggered a chain reaction of Chapter 11 filings from some of the biggest banks on Wall Street and pulled the country into the Great Recession. More than half a decade out, as the country limps to recovery, it’s understandable that many are still wary of big banks.
In spite of this, public opinion is shifting – particularly among the wealthy as we learned in yesterday’s post. A recent Nielsen survey found that the reputation of big banks has improved significantly in the last several years, with the number of positive ratings for financial institutions nearly doubling, from 17 to 32%. Several of the biggest banks in the country – Bank of America, Goldman Sachs, JPMorgan Chase, Citigroup and Wells Fargo – all saw improvements.
GOBankingRates investigated why more Americans like big banks now, finding that the answer is yoked to why they’ve always liked them: Because big banks pay big dividends, and not just to their customers. The personal finance website surveyed the biggest bank headquartered in every state and the District of Columbia, based on assets (a reliable indicator of size given that the six largest banks in the country own 67% of the financial system’s assets), investigating each bank on a number of factors:
What they found jibes with increasingly favorable public opinion, but flies in the face of the stigma of the big, bad bank: Big banks actually make huge contributions to their regions that smaller institutions just don’t have the heft to make. They employ millions, pay billions in taxes and offer the highest level of accessibility. In fact, many of the biggest institutions headquartered in each start are community banks, serving a specific region and its residents. In short, big banks play an integral role in the financial health of their communities – a larger one than they’re often given credit for.
Big banks are often thought of on a national scale. However the study uncovered the numerous ways these institutions prop up their local communities – through charity, outreach, taxes, and employment. Account holders might not be aware of the myriad ways their banks support themselves and their state, but, as poll numbers show, they still trust big banks with more than just their banking. For the full report, click here.