The collapse of Silicon Valley Bank this month has caused as much concern among U.S. voters as it did among investors, according to a recent Newsweek poll which found that 77 percent of Americans fear for the security of their own money in the light of the California lender's meltdown.
A majority of 70 percent of the 1,500 respondents to the poll, conducted on behalf of Newsweek by Redfield & Wilton Strategies on March 20, think that it's the government's responsibility to prevent bank failures that potentially threaten the stability of the entire financial sector.
It's a heavy weight to put on the shoulders of the Biden administration, whose response to the SVB collapse received the approval of 42 percent of respondents to the Newsweek poll, while 26 percent neither approved nor disapproved, 18 percent disapproved of it and 14 percent didn't know what to think of it.
Voters' dissatisfaction with the government's handling of the SVB collapse and the widespread panic that followed in the banking sector could have significant ramifications next year, when Americans head to the polls to vote for the next U.S. president.
In a previous interview with Newsweek, Thomas Gift, founding director of University College London's Centre on U.S. Politics, said: "Biden may not be responsible for any cascading effects of SVB's collapse, and the Fed's decisions over interest rate hikes are outside his control but how they shake out are likely to weigh heavy on 2024 [elections]."
The Biden administration acted swiftly to appease investors' fears and contain widespread damage to the banking sector in the immediate aftermath of the California lender's failure, telling depositors that they will be repaid in full regardless of whether they were insured or not, and shutting down New York-based Signature Bank to avoid contagion to the entire industry.
Biden also promised stricter regulation for banks, but the government's moves didn't immediately stop the panic spreading among investors.
Ultimately, U.S. voters believe that the main culprit for SVB collapse is the bank's own management, as indicated by 33 percent of respondents to the Newsweek poll. But 22 percent of respondents said that the U.S. Treasury Department was most responsible for the bank's failure, while 13 percent pointed the finger at the Federal Reserve.
While 37 percent of respondents to the Newsweek poll said that SVB management was "significantly responsible" for the bank's collapse, some 31 percent said President Joe Biden was equally responsible.
Some 22 percent of respondents considered Treasury Secretary Janet Yellen "significantly responsible," while 23 percent said the Federal Reserve was and 16 percent thought former President Donald Trump was.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Giulia Carbonaro is a Newsweek Reporter based in London, U.K. Her focus is on U.S. and European politics, global affairs ... Read more
