US investors are growing leery of the goverment’s financial rescue efforts and losing confidence in the stability of markets, a survey published on Friday showed.
The CFA Institute survey last month found fewer investment professionals in the US support the US Treasury Department’s Troubled Asset Relief Program (TARP), designed to shore up a financial system reeling from the global credit crisis.
Respondents also ranked higher US inflation and moral hazard as two significant long-term effects of the US Treasury Department interventions.
Non-US investment professionals “have a slightly more positive outlook,” a statement said.
“Our members, who are serious investment professionals, clearly have concerns as they monitor the US market and new proposals to stabilize the economy,” said John Rogers, president and chief executive of Institute.
The group said it conducted the e-mail survey between Jan. 14 and Jan. 20 of institute members and a small number of other investment professionals involved in ethics and advocacy.
It was the third survey after two polls, in late September and early October, designed “to gauge industry opinion on the level of government support through bailouts and whether market participants supported the US government’s bailout plan as the best alternative to alleviating the country’s economic crisis,” the institute said.
Last month’s survey found 34 percent of all respondents thought governmental support through bailouts was reasonable and necessary, compared with 37 percent in September.
Twelve percent said the government interventions should not have been done and no further steps are warranted, up from 9 percent in September.
In response to whether the bailout plan was the best solution to address the US economic system’s crisis, 57 percent said yes, down from 66 percent in the October survey.
“For many weeks, politicians, regulators and others have been calling the TARP funds a matter of economic survival, while the elements of the program seemed to continually change with little disclosure,” said Kurt Schacht, managing director of the CFA Institute Center for Financial Market Integrity.
“Now, the approach being discussed for the second-half of the TARP money is yet another recalibration. Investors are very concerned whether anything is working and if they are getting the full story,” Schacht said.
He said the survey showed that only 44 percent of respondents support the proposed government purchase of toxic assets from the troubled institutions.
Schacht noted that 74 percent of respondents last month had the same or less confidence in the markets since October, when the government stepped up interventions following the collapse of Wall Street investment bank Lehman Brothers in December.
The results of the survey of 4,112 respondents have a margin of error of 5 percentage points.
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