Public opinion on banks appears to be waning, according to a survey conducted in Aprilas the sector struggles to contain the collapse of several high-profile financial institutions in recent months.
A Gallup poll conducted in April across the United States with at least 1,000 respondents revealed that 48% of them stated that they were worried about their money in the bank, and almost 20% indicated that they were “very worried”.
It should be noted, however, that the survey was conducted after the failure of Silicon Valley Bank and Signature Bank, but before First Republic Bank failed in late April.
Republicans, lower-income adults and those without a college degree are more worried than their counterparts about the safety of their money in banks or other financial institutions. https://t.co/qhaQqu3mW6
—GallupNews (@GallupNews) May 7, 2023
Republicans, lower-income adults, and those without a college degree are more concerned than their counterparts about the safety of their money in banks or other financial institutions. https://t.co/qhaQqu3mW6
Gallup concluded that the level of concern was on par with that measured during the last bank-induced financial crisis in 2008. “when financial institutions previously thought to be ‘too big to fail’ collapsed.”
“The latest readings are similar to those of 2008. In September of that year, shortly after the collapse of Lehman Brothers, which remains the largest bankruptcy filing in US history.”
Hundreds of US banks are in jeopardy
For their part, experts from the think tank Hoover Institution postulate that if half of uninsured savers withdrew all their cash, 186 US banks would be at “potential risk of bankruptcy”.
These banks have total assets of $300 billion, but represent less than 5% of the 4,135 FDIC-insured commercial banks in the United States..
Furthermore, according to reports, California-based PacWest, Arizona-based Western Alliance and Memphis-based First Horizon are hanging by a thread after their stock prices plunged last week..
Earlier this month, the British daily The Telegraph published a stronger report suggesting that half of US banks could be insolvent..
He cited research published in April by Amit Seru, a banking expert at Stanford University, who estimated that more than 2,315 US banks currently have assets worth less than their liabilities.
“The market value of the US banking system’s assets is $2.2 trillion less than the book value of its assets suggests, taking into account the held-to-maturity loan books,” he said..
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