According to a recent poll from Gallup, nearly half of Americans are concerned about the safety of their money deposited with banks.
Public opinion of banks appears to be dwindling according to an April survey, as the industry struggles to contain the collapse of several high-profile financial institutions in recent months.
A Gallup poll conducted across the United States in April with at least a thousand respondents revealed that 48% of them said that they were concerned about their money in the bank, with almost 20% who indicated they were “very concerned.”
It should be noted however that the poll was conducted after the collapse 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
Gallup concluded that the level of worry was on a par with that measured during the last bank-induced financial crisis in 2008 “when financial institutions previously believed to be “too big to fail” collapsed.”
“The latest readings are similar to those in 2008. In September of that year, shortly after the collapse of Lehman Brothers, which remains the largest bankruptcy filing in U.S. history.”
Hundreds of American banks at risk
Meanwhile, experts at the Hoover Institution think tank postulate that if half of all uninsured savers withdrew all of their cash, 186 American banks would be at “potential risk of impairment.”
These banks have total assets of $300 billion but represent less than 5% of the estimated 4,135 FDIC (Federal Deposit Insurance Corporation) insured commercial banks in the United States.
Furthermore, according to reports, California-based PacWest, Arizona’s Western Alliance, and Memphis-based First Horizon hang in the balance following a share price slump last week.
A more damning report emerged from the UK’s Telegraph earlier this month, suggesting that half of the banks in America could be insolvent.
It cited research published in April by Stanford University banking expert Amit Seru, who estimated that more than 2,315 U.S. banks are currently sitting on assets worth less than their liabilities.
“The U.S. banking system’s market value of assets is $2.2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity,” he said.