We used to be one of the big dogs. Less than 3 years ago, we were at least in the top 5.

Now you’re looking at a graph from Econompicdata visualizing the rankings from the most recent World Economic Forum. The U.S. has slipped all the way down to 40th ‘soundest’ banking system in the world.

Of course, one could say this is all merely based on perception. This ranking is based on findings from the opinions of many of the world’s executives that handed banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets). [Kind of like the Coaches’ Poll for College Football]

Obviously because of the massive bailouts, failed banks, and overall financial apocalypse in the U.S. dominating the world headlines, our ‘perception’ wouldn’t be so great. But we’re still home to Wall Street, the epitome of the high finance and big business, so shouldn’t we be miles ahead of Botswana, Namibia and Estonia?

However, that’s exactly the problem. In these rankings it seems silly that we’re behind Botswana among other no-name banking systems, but the idea of credit lending, solvent businesses, and liquid markets all depends on your perception in the world. Same goes for stock prices and the stock exchanges. If a majority of people believe a company is doing poorly, that’s all that it takes to make that stock drop dramatically.

So until our rate cuts, bailout plans, and rescue packages begin to take hold and ease the general fears of the marketplace, we’ll be wallowing around the 40th spot on a list we should easily be dominating.

Hey, at least we’re destroying Kazakhstan (124), Ethiopia (128), and Algeria (134) on this list. Self confidence has to start somewhere.

Reuters: Canada Ranked World’s Soundest Bank System, October 9, 2008

Econompicdate: The US Banking System Is Over-rated, October 9, 2008