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@article{Kosova:2026,
author = {Kosova, R and Michaelides, A},
journal = {Journal of Financial Literacy and Wellbeing},
title = {Trust and investment loss: evidence from uk financial corporate failures},
volume = {,forthcoming},
year = {2026}
}
TY - JOUR
AB - How does experiencing direct investment loss affect individuals’ trust in the financial system? Exploiting recent UK corporate financial failures that generated press headlines, government debates and institutional criticisms, we design and analyse a survey involving investors in these failures. We find that direct exposure to investment losses significantly reduces trust in financial markets, regulators, big audit firms, and the likelihood of future risky asset market participation. Moreover, trust loss is not fully reversible even with possible compensation. Individual characteristics are not the key drivers of trust losses/gains either. We also survey master’s students exposed to reading about these failures. Information about losses of others reduces trust but less than direct experience. Overall, our results emphasize the role of personal experience in determining trust and future investment decisions.
AU - Kosova,R
AU - Michaelides,A
PY - 2026///
SN - 2753-3212
TI - Trust and investment loss: evidence from uk financial corporate failures
T2 - Journal of Financial Literacy and Wellbeing
VL - ,forthcoming
ER -