This paper examines the role of societal and organizational trust in mitigating market risk within the banking sector. Using a global sample of 10,616 bank-year observations across 45 countries, we find that higher trust significantly reduces bank total and idiosyncratic risk. The risk-mitigating effect of societal trust becomes more pronounced for banks headquartered in countries with weaker investor protection, diminished legal rights, dissatisfaction with government economic policies, and higher political unrest. Our results suggest that trust serves as an alternative governance mechanism, substituting for ineffective formal institutions in reducing bank risk. These findings have important implications for financial regulation worldwide.

中文翻译：

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信任很重要：全球视角下信任对银行市场风险的影响

本文探讨了社会和组织信任在降低银行业市场风险方面的作用。通过对 45 个国家/地区 10,616 个银行年度观察的全球样本进行分析，我们发现较高的信任度可显着降低银行总体风险和特殊风险。对于总部位于投资者保护较弱、合法权利减少、对政府经济政策不满以及政治动荡加剧的国家的银行来说，社会信任的风险缓解作用变得更加明显。我们的研究结果表明，信任可以作为一种替代治理机制，取代无效的正式机构来降低银行风险。这些发现对全球金融监管具有重要意义。