By Nick Carey
CHICAGO, April 8 (Reuters) - After months of bad economic news, Americans' trust in the U.S. financial system is still falling, according to a survey released on Wednesday.
The Chicago Booth/Kellogg School Financial Trust Index fell to 19 percent in March from 20 percent in an inaugural poll in December.
Trust toward banks fell to 29 percent from 34 percent, and trust toward large corporations slid to 10 percent from 12 percent.
Bucking the trend, trust in the stock market rose to 13 percent from 11 percent. The survey polled 1,013 individuals in the first two weeks of March.
Co-authors Paola Sapienza of the Kellogg School of Management at Northwestern University and Luigi Zingales of the University of Chicago Booth School of Business attributed the rise in faith in the stock market to an "aura of goodwill surrounding" the early days of the administration of U.S. President Barack Obama, who took office in January, and to Obama's plans to tackle the country's financial crisis.
"We discovered clear signs that trust in the stock market has gone up in all areas that we measure, such as a higher willingness to invest, higher expectations on returns, and lower expectations that the stock market will drop significantly," said Zingales. "In a short amount of time, this shows growth in overall confidence in the market, however slight."
Sapienza said, "The drop in trust toward banks and large corporations appears to be consistent with the negative publicity they've experienced in the first quarter of 2009. This tarnished image, especially of banks, could impact their value moving forward in terms of rebranding and attracting new customers."
In what has been called the worst financial crisis since the Great Depression, the government has committed trillions of taxpayer dollars to shore up the battered financial system. (Reporting by Nick Carey, editing by John Wallace)