Recent public opinion on banks seems to be waning, as indicated by a Gallup poll conducted in April, with the industry grappling to contain the collapse of several notable financial institutions in recent months. The poll, which surveyed at least a thousand respondents across the United States, revealed that 48% were concerned about their money in banks, while nearly 20% expressed being “very concerned.”
It is crucial to note that this poll was taken after the collapse of Silicon Valley Bank and Signature Bank, but prior to the failure of First Republic Bank in late April. Gallup concluded that the level of anxiety was similar to what was measured during the last bank-induced crisis in 2008, when previously perceived “too big to fail” financial institutions crumbled.
Today, experts at the Hoover Institution speculate that if half of 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.
A more alarming report from the UK’s Telegraph earlier this month posits that half of American banks could be insolvent. The research, published by Stanford University banking expert Professor Amit Seru in April, estimates that over 2,315 U.S. banks currently hold assets valued less than their liabilities.
With bank safety concerns on the rise, it may lead some to question if cryptocurrencies offer a more secure alternative. While cryptocurrencies’ decentralized structure removes the risk of a single point of failure and offers increased transparency, price volatility and security risks associated with digital wallets cannot be ignored.
As the US banking system endures tumultuous times, it remains to be seen if cryptocurrencies can establish themselves as a more stable and secure choice for consumer finances. Public opinion regarding banks may be shifting, but critical evaluation of potential alternatives is essential to maintain healthy skepticism and informed decision-making.