After SVB Bank collapsed a few weeks back, people started panicking like the test might be positive. You know the test I’m talking about, don’t even pretend. How bad is it? A recent poll shows that only 10% of Americans have high confidence in our banks and financial institutions. Not good…
Here’s Five Fast Facts About The Current State of US Banking:
- 🏦 So What Happened? - SVB is the 16th biggest bank in the country. It made a bunch of risky bets on the bond market. Another bank, Signature, was closed by regulators after it got involved (and lost money) in crypto.
- 📊 Gimme - In the few days after, 16% of Americans moved their money from large banks mostly to regional or small banks. There’s probably a tiny percentage that moved their money to a mattress, a coffee can, or a hole in the backyard.
- 📉 Already Low - A lack of confidence in the banking system isn’t a new trend. In 2020, 22% said they have no confidence in banks. The drop can be traced back to the financial downturn in 2008 and it hasn’t really recovered.
- 🙅♀️ Regulate! - The same poll shows that 56% feel the government isn’t doing enough to regulate banks. In fact, legislation rolled back some strict regulations in 2018.
- 📅 No Different - While all of those numbers raise eyebrows, statistics actually indicate that nothing has really changed. It seems 41% of Americans still use national banks and only 15% rely on community banks. These are the same numbers that were on record before the banking failures.
🔥Bottom line: The sky is not falling. That’s the easiest way to put it. The banks that failed were involved in niche markets. However, it’s perfectly normal to question your bank’s intent. But if you’re going to make a change, do your research first, rather than react with a knee jerk.
How do you feel about your bank?
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