According to a recent survey, public confidence in the banking sector has plummeted since the failure of two major banks earlier this month and the subsequent market turmoil. Just 10% of respondents in a poll released by the Associated Press and the University of Chicago’s NORC Center for Public Affairs Research on Wednesday indicated they have a “great deal” of confidence in banking and financial organizations.
That’s down from a 2020 survey’s 22% who claimed they did. Sixty-one percent of people polled indicated they only have “some” faith in banks, and another 30 percent said they have “hardly any” faith in banks.
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Just one sector, government, had a lower percentage of respondents who said they have a lot of faith in the institution than Congress did among the sectors included in the study. Of registered voters, only 10% of Democrats and 8% of Republicans indicated they have a lot of faith in the banking system.
Earlier this month, Silicon Valley Bank failed because it had insufficient funds to cover customer withdrawals and had to liquidate assets to stay open. Some days later, cryptocurrency-focused Signature Bank likewise failed.
In an effort to reassure customers and the market, the federal government has guaranteed all client deposits, regardless of whether or not the total amount exceeds the $250,000 cap on coverage provided by the Federal Deposit Insurance Corporation.
After many of its customers relocated their money to larger banks, the major financial institutions in the country bailed out San Francisco’s First Republic Bank to the tune of $30 billion.
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Opinion pollsters also discovered widespread cross-party agreement on the idea that the government’s oversight of the financial sector is lacking. Around 57% of Republicans felt that way, while 63% of Democrats did.
Among those polled, only 15% felt there was an excessive amount of government oversight, while 27% felt it was just right. Silicon Valley and Signature banks have taken a lot of heat since their collapses since they were major advocates for reducing regulations meant to avert another Great Recession.
On Wednesday, Federal Reserve Chairman Jerome Powell reiterated that the banking sector is still “sound,” despite the recent turmoil. Throughout the course of the week of March 16-20, 1,081 adults participated in the survey. The survey had a 4% margin of error.
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