Americans are wary of bailouts as banking concerns mount - Reuters/Ipsos
poll
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[March 16, 2023] By
Jason Lange
WASHINGTON (Reuters) - A bipartisan majority of Americans oppose U.S.
taxpayers footing the bill when bad management causes a bank to fail,
though Republican opposition to bank bailouts has softened over the last
decade, a Reuters/Ipsos poll completed on Wednesday found.
The poll's results point to a potential political problem for Democratic
President Joe Biden's administration should the signs of shakiness in
the U.S. banking sector worsen and prompt more aggressive government
action.
The two-day Reuters/Ipsos poll found 84% of respondents - including
strong majorities of Republicans and Democrats - think taxpayers should
not have to pay to resolve problems caused by irresponsible bank
management.
Stock markets have swooned around the world since Silicon Valley Bank
collapsed on Friday as worried customers pulled their deposits. Two days
later, New York's Signature Bank closed. On Wednesday, U.S. stocks fell
sharply as turbulence at Swiss banking giant Credit Suisse revived fears
of a new banking crisis.
Banks have been stressed in recent months by rising interest rates,
which reduce demand for borrowing money. In a series of moves
telegraphed in advance to investors, the U.S. Federal Reserve, America's
central bank, has pushed interest rates higher over the last year in a
bid to tame inflation.
Only 49% of Americans - 40% of Republicans and 55% of Democrats - said
they favored government bailouts of financial institutions.
Still, support for bailouts was even more tepid a decade earlier, when
the United States was emerging from a financial crisis which the
government fought by spending hundreds of billions of dollars on bank
bailouts. In a 2012 Reuters/Ipsos poll, only 20% of Republicans and 53%
of Democrats said they supported bailouts.
About half of respondents to the Reuters/Ipsos poll said they had heard
at least a fair amount about Silicon Valley Bank's implosion.
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The exterior of the U.S. Capitol is seen
at sunset in Washington, U.S., December 13, 2022. REUTERS/Sarah
Silbiger/File Photo
Sixty-eight percent said they had at least a fair amount of
confidence in the stability of their own bank, and the same
percentage had at least that level of confidence in banks more
generally.
Some 77% of respondents said that shareholders and executives who
profited from a bank in the days before it failed should have to
return those funds to depositors.
U.S. regulators promised to make whole all depositors at Silicon
Valley Bank and Signature Bank, even those with accounts above the
Federal Deposit Insurance Corp's standard $250,000 limit, without
taxpayers having to cover any costs. Businesses make up many of the
bank clients whose money had not been previously guaranteed by the
government.
The Reuters/Ipsos poll showed broad bipartisan support for
Washington backing bank deposits. Seventy-eight percent of
respondents said the government should guarantee the deposits of
individuals and 70% said Washington should backstop company
deposits.
But a strong bipartisan majority also said depositors in banks
should understand the risk of using a bank to make deposits outside
of FDIC limits.
Some experts say the more expansive deposit guarantees regulators
are applying for the troubled banks already amount to a bailout
because they remove people's incentive to guard against financial
risk.
The Reuters/Ipsos poll, conducted online, surveyed 1,004 people
nationwide and had a credibility interval of about 4 percentage
points in either direction.
(Reporting by Jason Lange in Washington; Editing by Scott Malone and
Matthew Lewis)
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