CFA Institute members globally support by a 3-to-1 margin worldwide government intervention to directly invest in the equity of banks, according to the results of a poll distributed to the 98,000 members of the association of investment professionals.
As of Tuesday, 75% or 3,174 members, favored government taking equity stakes in banks, while 25% or 1,082 members, oppose the model, said a CFA Institute statement about the survey’s results.
Some 51% believe the market absolutely cannot sort out the credit market freeze without government intervention, while only 6% completely agree that the market alone can open up the credit market. The rest of the respondents were in the middle, although decidedly tilting toward government intervention.
Some 25% believe full disclosure of bank assets, asset valuations and valuation assumptions would help free up the credit markets, while 33% somewhat believe full disclosure would do so. Some 5% believe full disclosure would not, while 15% somewhat believe it would not and 23% were neutral on the question.
Among other questions, 83% believe government guarantee of all short-term debts of solvent financial institutions would restore confidence needed for institutions to resume trading with each other, while 17% or 660 respondents believe it would not restore confidence.
