The contemporary bank versus paradigm of public trust

Abstract

Evaluation of contemporary bank is usually determined by the experience of financial crises with banks in the leading role. In this context, the idea that the bank is the subject of a  special social mission is more and more questionable. The dilemma of “public confidence” in the bank requires attention to the nature of trust in business relationships. The study highlights the three perspectives of the trust based relationship, known as: the bill of trust, immanent credibility and forced trust. Presented on selected examples, the implementation of the idea of trust in each of these areas is undermined. The underlying cause of this is fundamental systematic conflict. It does not allow state institutions to effectively control the banks, while, at the same time, taking over the responsibility for their safety. The only way out of this impasse is separation of deposit – credit banking (which would be under the control of the state) from investing activities. This would mean a  return of the Glass Steagall Act spirit. This concept is considered at the work on the next instalment of the Basel regulations (Basel III) as well as the “banking union”.