Bank failures eroding trust in US finance.
Survey Shows Americans Losing Confidence in Financial System
A recent Gallup survey has revealed that recent events are causing Americans to lose confidence in the US financial system. The survey found that nearly half of the 1,013 adults polled were either “very worried” (19%) or “moderately worried” (29%) about the safety of their money in banks or other financial institutions. Only 20% said they weren’t worried at all, while almost a third said they were “not too worried.”
Similar to 2008
The level of concern expressed in the poll is similar to the findings that Gallup found shortly after the collapse of Lehman Brothers in September 2008. However, this is not a survey that Gallup conducts regularly, so it is difficult to say how attitudes have changed over time. Still, a December 2008 reading had shown sentiment had already improved from those worst levels as steps were taken to ease the impact of the financial crisis.
Recent Failures
When the poll was conducted from April 3-25 this year, Signature Bank and Silicon Valley Bank had already failed. Since then, regulators have taken possession of First Republic and sold its assets to JPMorgan Chase. On Thursday, a number of regional bank stocks sank, with Los Angele-based PacWest cratering more than 46%. That stock is now down 86% this year.
Protecting Deposits
The Federal Deposit Insurance Corp. backs deposits up to $250,000 per depositor. For those with accounts above the insured limit, there are several steps that can be made to protect more than $250,000.
Concern Across Demographics
According to Gallup, those who identify as Republican or independent as well as those with middle- and lower-incomes were more likely to be concerned about their money. The same was true for Americans without a college degree.
Related Investing News
- Bill Nygren buys this regional bank with strong deposits, says ‘inappropriate role’ of short selling contributing to fears
- JPMorgan upgrades 3 regional bank stocks to ‘buy’ in bold move against short sellers
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