Written by Daniel Martin, Ph.D., and Bruce Cahan, J.D.
The Bank CEO Who Listened
David Brooks recently shared a conversation with a bank CEO. Economists found downside risks to continuing the bank’s presence in Italy. The CEO knew staying there would be unprofitable in the short term but didn’t want to be a “fair weather friend” and so remained in Italy. The CEO knew that banking is driven by trust, a goodwill asset controlled by customer emotions, not bankers. Research suggests positive emotions (gratitude and happiness) increase trust, and negative emotions (anger, betrayal) decrease trust.
Emotions, Spending, Soothing and Justifying
Banks fund the emotional well-being and suffering of communities by managing the communities’ money exchange. A simple example: When depressed, angry or upset, how many of us just go shopping and pay by credit card? We live in a consumer society that encourages material gain as a representation of well-being and status, despite the negative consequences. Sivanathan & Pettit (2010) found that when self-integrity is threatened, consumers purchase status-related goods to soothe psychological pain, especially when they cannot reaffirm status in other ways. Kasser & Ryan (1993) found that people aspiring to financial success achieve less self-actualization and vitality and suffer more depression and heightened anxiety.
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