Confidence

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1. Risk evaluation - risk management - assurance.

A high degree of belief or trust.


More and higher-quality capital has improved confidence in banks, especially in bad times
"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.


Only well justified confidence about the risks of powerful AI systems is enough to continue their development
"Powerful AI systems should be developed only once we are confident that their effects will be positive and their risks will be manageable. This confidence must be well justified and increase with the magnitude of a system's potential effects..."
Pause Giant AI Experiments: An Open letter - March 2023 - Future of Life Institute.


2. Market conditions - sentiment.

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.


Confidence improving modestly
"...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.


Will returning confidence allow firms & consumers to rebound to their old investment & spending patterns?
"Economists are actively debating [the recovery] ... Much of this discussion revolves around confidence, fear and the ability of firms and consumers to rebound to their old investment and spending patterns.
Our goal is to formalize this discussion and quantify these effects... we use a standard economic framework, with one novel channel: a “scarring effect.” Scarring is a persistent change in beliefs about the probability of an extreme, negative shock to the economy."
Kozlowski, Veldkamp and Venkateswaran. Covid Economics 8, 22 April 2020, p2.


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 identify likely ranges of true values
"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. Behavioural skills - psychometric profiling - coaching - learning and development.

In individuals, confidence is a high degree of belief in one's own abilities, either in particular fields or activities, or more generally.

For example, characteristic strengths of the co-ordinator Belbin team role include maturity, confidence, identifying talent and clarifying goals.


Excessive self-confidence is associated with optimism bias and the Dunning-Kruger effect, potentially leading to excessive risk-taking and operational errors.

Inappropriately lowered self-confidence is associated with the Impostor syndrome. When we don't have enough confidence in our decision-making abilities, it can lead to analysis paralysis.

Training and personal development work can be very beneficial in addressing personal confidence.


Coaching may help personal confidence
"A programme of coaching may also have a positive impact on an individual’s personal attributes, such as social interaction or confidence."
Coaching - the Treasurer's Wiki.


Self-confidence & strategic networking
"Step one is to change your mindset. Actually attend. Go to the event... Networking in essence is simply having a chat. It doesn't even have to be about work or industry related things to start with...
Once you build up the confidence, you can start being more strategic about the people you want to network with."
How to raise your personal profile - ACT Learning resources.


5. 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


Other resources

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