Concerns about the rickety banking system in the United States continue to mount. According to a poll according to research firm Gallup, nearly half of all Americans are very concerned about a banking crisis. For example, it does not feel comfortable for them to keep their money under management at banks.
Small banks are at great risk
The poll results are fairly evenly distributed. A slightly larger proportion of the respondents say that they are (still) relatively unconcerned. The poll was conducted after the closure of Silicon Valley Bank and Signature Bank earlier this year. Opinions may therefore have changed slightly after the fall of the First Republic Bank at the end of last month.
Remarkably, the level of worry is currently comparable to the level in 2008, during the last major financial crisis. Even then, many people believed that the “major financial institutions were too big to fail,” but then they did.
“The latest figures are comparable to those of September 2008, shortly after the fall of Lehman Brothers, which is currently the largest bankruptcy in US history.”
According to the Gallup poll, Republicans, lower-income and uneducated people are particularly concerned. Experts at the Hoover Institute believe that people are right to be concerned. Hundreds, especially small banks, are at great risk, the experts say.
Is there anything coming?
In a hypothetical scenario where half of all uninsured customers withdraw their money, 186 banks are at high risk of failing, according to the Hoover Institute. If that’s not cause for concern, a report from the Telegraph might be.
Earlier this month the UK news channel referred to a Stanford study showing that half of all US banks may be insolvent is. This means that in reality they do not have enough liquidity to pay their bills and their creditors.
Even if we look at the financial markets, something seems to be bubbling. For example, last week we saw the gold price rise to historic highs. Gold is the classic inflation hedge, and an increase in demand for gold usually means investors are concerned. Bitcoin (BTC) rose even faster this year due to concerns about the banks.