The strong economy has exposed American consumers to an apparently incurable case of optimism about the banking system.

Since the United States began its current expansion back in 1992, the public's faith in the health and safety of banks and the overall financial infrastructure has gotten consistently stronger, according to surveys commissioned by American Banker.

In the latest poll, conducted by the Gallup Organization two months ago, nine out of 10 people, a higher proportion than in any of the newspaper's 14 previous national telephone surveys, rated the nation's banking and financial system as healthy.

The results-among a wide range of findings to be reported today and Wednesday and more extensively in an American Banker supplement to follow- should be heartening to bankers. They are basking in the same glow that keeps everything from stock market averages to the Conference Board's economic confidence indexes to President Clinton's job-approval ratings at high, even all-time-high, levels.

Perhaps those good feelings can help commercial banks stem the tide of market-share losses to securities brokers and mutual funds. These competitors, other American Banker/Gallup results indicate, do not measure up to the same level of public trust that banks enjoy. (See related article on page 6.)

There is a caveat: The American financial consumer has held banking health in high regard in other periods of economic strength, but that did not prevent inroads by nonbanks. And when the economy turns sour, so can these good feelings. That happened in the 1991 recession, when consumers were almost evenly divided on whether the banking system was healthy.

The banking-approval ratings have risen so high that any change from here is likely to be in the opposite direction, which some observers see as a cause for alarm.

Since the last American Banker survey was conducted, in October and November of 1997, there occurred a presidential impeachment, an economic crisis in Asia and in developing countries elsewhere, military escalations in the Middle East and Yugoslavia, the biggest mergers in banking history, and storm clouds of concern about the ability of the economy and the business community to deal with year-2000 technology glitches.

Meanwhile the proportion of the roughly 1,000 respondents in each poll who considered the banking and financial system fairly or very healthy rose to 89%, from 85% 18 months ago.

Those who deemed it unhealthy dropped to 9% from 11%, and the undecideds were whittled down to 2% from 5%. (The percentages are rounded, and the margin of error is plus or minus 3 percentage points. Each respondent has at least one banking, transaction, or loan account. People who do not, the "unbanked," are excluded from the survey.)

"The American public seems to be focused on the domestic bottom line," said Charles W. Calomiris, a Columbia University finance and economics professor. "They seem to be able to disentangle the financial position of the banks from the broader crisis-reporting spree about the global financial system."

"It does represent a challenge for the industry," said James A. Sexton, the Federal Deposit Insurance Corp.'s director of supervision. He said banks will have to work hard to "continue to merit that sort of confidence."

Diane C. Swonk, deputy chief economist at Bank One Corp. in Chicago, was struck by "how little evidence there was" that year-2000 worries were affecting confidence levels. She said she saw cause for alarm in reports of "people putting money in their mattresses because of Y2K."

"Anyone reading the headlines had to be concerned," she said.

Instead, the industry continued to recover, as it were, from the nadir of 1991 and 1992, when 51% deemed the banking and financial structure fairly or very healthy.

That "health index" climbed to 64% in 1993, 77% in 1994 and 1995, 78% in 1996, 85% in December 1997, and 89% this year.

The last number puts the ratio of "healthy" to "unhealthy" responses at 10-to-1, a gap rarely encountered in polling of this kind, and never before on this question.

Before the current run-up, the peak of optimism was 74%, in 1985, when the "unhealthy" responses numbered 22%.

"I think the positive numbers reflect the healthiness of the economy," said Christine Chmura, senior economist at Capital Research and Analytics of Richmond, Va. "Clearly, a recession would change that picture."

"What amazes me about these confidence surveys is that they are always a mirror image of the unemployment rate," said David Orr, chief economist at First Union Corp., Charlotte, N.C. "I think people extrapolate their own personal well-being to the institutions of the economy."

Within the statistical compilations supplied by Gallup, the Princeton, N.J., company that has been working with American Banker since 1991, are some intriguing patterns.

Men have a rosier view than women. Of 532 male respondents, 31% called banks "very healthy," compared with 22% of the 470 women. The men were simply more willing to give the more extreme opinion, as they have been year after year. (The sexes were equal in "unhealthy" responses, at 8%.)

Averaging out all responses, 27% rated the system "very healthy," up from 25% in 1997 and another record high.

On a question somewhat different from the one about the health of the banking and financial system, pertaining instead to levels of confidence in the banking system's safety and security, 38% said they had a "great deal" of confidence and 51% had "some." The total, 89%, was down one point from 1997, a statistically insignificant difference.

The gender gap showed up here too, as 43% of men said they had a "great deal" of confidence, versus 33% of women. (Just 3% of men and 2% of women said they had no confidence in the system's safety and security.)

"My guess is that it is partly because of income differential," Ms. Swonk said.

There are, indeed, demographic correlations with these consumer attitudes. Optimism tends to improve with advancing education, age, and income levels.

Of people with no more than a high school education, 87% said the system is at least fairly healthy and 82% had some degree of confidence in its safety and security. For college graduates those numbers were 90% and 92%; for postgraduate achievers they were 92% and 95%.

Such differences were more pronounced in the extreme responses. For example, 28% of the high-school-or-less group had a "great deal" of confidence, compared with 54% of the postgraduates.

Of people 18 to 34, 21% considered banks and banking "very healthy." That rose to 28% of those between 35 and 44 and 31% in the 55-to-64 range.

Consumers reporting household incomes above $75,000 a year were nearly twice as likely as those earning less than $40,000 to call the banking system "very healthy"-by 41% to 22%. The income group in the middle came in at 25%.

"Maybe (the higher earners) understand the system better, use it more, and therefore have more trust in it," Mr. Orr said.

"You're more insecure when you're lower-income, because when you lose it, it means a lot more," Ms. Swonk said.

Enhancing the optimism in this year's survey is the fact that the total "health" score of 89% for the first time equaled the "safety" score.

The concepts are nevertheless distinct in consumers' minds. In the 1991 survey, for example, the low "health" score of 51% was fully 25 percentage points below the "safety" score.

Mr. Calomiris said people would tend to see "safety" as a proxy for deposit insurance and "health" as representing industry well-being. Today's parity suggests consumers view the banking industry and its deposit insurance as equally reliable, he said.

"That fits in with the concept of, 'It doesn't matter if they're healthy, (because) they're still safe,'" Mr. Orr said.

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