News USA but Remains Negative

Financial institutions reveal downgrades continued to outnumber upgrades across all regions, although only by a small margin. This quarter, the highest numbers of upward revisions were seen for the UK/Europe institutions, due in part to the improved UK housing market increasing loan demand.

Counterparties: Credit Spreads as an Indicator of Trust In

the fourth quarter,

credit default spreads (CDS) continued a long- term tightening trend, reflecting an overall increase in confidence among the Top 50 Global Financial institutions in pricing the relative risk of doing business with each other. Institutions in the Americas ended the year

with tightest spreads, and Asia the widest. With the average spread for the Top 50 Global Financials at about 103 basis points, CDS ended 2013 far below 2011’s high of nearly 350, demonstrating the positive appetite in the bond market and reduced risk of default. Regulation as a Barometer of Trust

According to Chris Perry, managing director of Risk at Thomson Reuters, “The proliferation of regulatory activity over the past several years must be seen as a growing and permanent condition for the global financial industry and a significant factor in the cost of doing business”.

The average daily number of regulatory alerts tracked by Thomson Reuters

Accelus was above 100 for the second consecutive quarter, roughly double the daily average in 2010, and at the end of 2013 stood at 26,898 alerts, an increase of 43 percent over 2012 (18,761). This increase reflects both increased activity by regulators and additional monitoring by Thomson Reuters.

Tracking Controversy and Governance as Factors in Rebuilding Trust

Thomson Reuters ASSET4 environmental, social and governance data, shows that a high level of controversies have been reported for the Top 50 Global Financials relative to the Financial Sector as a whole, but that adoption of processes and governance to address responsible

marketing

54 percent considering new geographies or product sectors. The regulatory environment remains a

barrier and has been the primary reason cited by 35 percent of CFOs for not pursuing transactions.

Obama Announces New Public- Private Manufacturing Innovation Institute

Barack Obama has announced new steps with the private sector to strengthen the manufacturing sector, boost advanced manufacturing, and attract the good paying jobs that a growing middle class requires. This month, the President announced the selection of a North Carolina headquartered consortium of businesses and universities, led by North Carolina State University, to lead a manufacturing innovation institute for next generation power electronics.

President Obama has declared 2014 a year of action, and while he will continue to work with Congress on new measures to create jobs and grow the U.S. economy, he will also use his executive authority to get things done. After shedding jobs for a decade, the nation’s manufacturers have added 568,000 over the past nearly four years, including 80,000 over the past five months. Manufacturing production has grown since the end of the recession at its fastest pace in over a decade and

the President is committed to building on that progress. Obama remarked “As long as we keep working together and fighting together and doing what it takes to widen the circle of opportunity for more Americans so nobody is left behind -- if you work hard, if you are responsible, then you can go out there, get a skill, train yourself, find a job, support a family. If we work together, and that’s our focus, there’s nothing we can’t achieve. There’s no limit to how far we can go.”

15

practices, improve fair competition and avoid bribery and corruption, all continue to be priorities.

Thomson Reuters TRust Index leverages proprietary data

analytics, news

and social media sentiment analysis.

This latter

indicator draws on over four million business and financial news and media sources to track the state of trust in the Top 50 Global Financial institutions.