Confidence

1. Risk evaluation - risk management - assurance.

A high degree of belief or trust.

"Of all the post-crisis reforms, by far the most important has been the international effort to improve the quality and quantity of banks’ financial resources – and in particular, the tripling of banks’ capital levels, which means far more losses can be absorbed before a bank becomes insolvent. We now estimate that the UK banking system holds enough capital to survive a global recession worse than the 2008 crisis.

This underpins the whole system. It means investors and depositors can have confidence in firms, especially in bad times when that confidence is really needed. It also gives the authorities more options to manage stresses when they occur, by reducing the likelihood that taxpayers will end up on the hook for losses."

Sam Woods - Bank of England Deputy Governor for Prudential Regulation and Chief Executive Officer for the Prudential Regulation Authority - October 2023.

2. Market conditions.

Optimism about a particular market, or wider economic prospects.

For example, as measured by the Business Insights and Conditions Survey and the GfK consumer confidence index.

"...indicators of consumer confidence and housing have improved modestly in recent months.

The GfK consumer confidence index recovered further in December and January with all subcomponents of confidence improving."

Bank of England Monetary Policy Report, February 2024, p44.

3. Risk evaluation - risk management - assurance.

A measure of the degree of reliability of a statement or finding.

Identified, for example, by a confidence level or confidence interval.

"Confidence intervals use the standard error to derive a range in which we think the true value is likely to lie. A confidence interval gives an indication of the degree of uncertainty of an estimate and helps to decide how precise a sample estimate is. It specifies a range of values likely to contain the unknown population value. These values are defined by lower and upper limits."

UK Office for National Statistics - Uncertainty and how we measure it for our surveys.

4. Law.

An area of law protecting private information from unauthorised disclosure.

For the avoidance of doubt about whether or not information is private, it is often made the subject of a confidentiality agreement.

See also

• ACT Competency Framework
• ACT Ethical Code
• Assurance
• Bank of England
• Breach of confidence
• Business Insights and Conditions Survey
• Capital adequacy
• Confidence indicator
• Confidence interval
• Confidence level
• Confidential factoring
• Confidential information
• Confidential invoice discounting
• Confidentiality
• Confidentiality agreement
• Consistency
• Copyright
• Designated confidential information
• Economic sentiment indicator (ESI)
• GfK consumer confidence index
• Global Financial Crisis (= 2008 crisis)
• Insolvent
• Intellectual property (IP)
• Law
• Monetary policy
• Monetary Policy Report
• Non-disclosure agreement (NDA) = confidentiality agreement
• Office for National Statistics
• Prudential regulation
• Prudential Regulation Authority (PRA)
• Recession
• Risk-off
• Risk-off asset
• Risk-on
• Standard error
• Stress
• Trust

Other resources

• Bank failures - Sam Woods, Bank of England Deputy Governor for Prudential Regulation and Chief Executive Officer for the Prudential Regulation Authority - October 2023
• Bank of England Monetary Policy Reports
• UK Office for National Statistics - Uncertainty and how we measure it for our surveys