16% Of Americans Moved Money After Silicon Valley Bank Failure, Poll Suggests

Topline

Almost one-in-six American adults decided to move at least some of their money as a direct result of recent regional banking failures, with 10% moving “all” of their money, according to a Morning Consult poll, as the collapse of Silicon Valley Bank and other institutions shakes the confidence of both Wall Street and American consumers—even as top officials say the banking industry is solid and Americans’ money is secure.

A security guard at Silicon Valley Bank monitors a line of people outside the office on March 13, … [+] 2023 in Santa Clara, California. (Photo by Justin Sullivan/Getty Images)

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Key Facts

The poll of nearly 2,200 U.S. adults carried out Thursday and Friday found 16% moved some or all of their money, though most transferred their assets to regional, local or digital banks.

Some 73% of those who moved money are men, while 58% are members of the Millennial generation and almost half (46%) reported owning cryptocurrency—all numbers far higher than the makeup of the general U.S. population.

Despite a sizable chunk of Americans deciding to shift where their money is held, almost nothing changed about the share of primary banking providers across demographics.

Around 41% of Americans primarily use national banks, according to the poll, while 15% rely on regional banks, another 15% use community banks and 7% opt for digital banks—exactly the same numbers recorded before the banking failures.

Credit unions were the only institutions recording a boost in primary usage, rising from 22% to 23%, within the poll’s two-point margin of error.

Contra

The Federal Deposit Insurance Corporation insures up to $250,000 in each bank account in the event of a bank failure. The Treasury Department took the unusual step of letting depositors withdraw all of their money after SVB’s collapse, though, and Treasury Secretary Janet Yellen has suggested similar measures could be taken if more banks fail.

What To Watch For

The poll found 23% of American adults are considering “starting a relationship” with a new bank in the next six months—up from 15% in a February Morning Consult survey.

Key Background

SVB’s collapse on March 10 following a social media-fueled bank run has roiled the banking industry—especially some regional banks—due to liquidity concerns. The run on SVB came after it announced plans to sell additional stock to raise funds, signaling that its decision to invest billions of dollars’ worth of deposits in government bonds backfired when the Federal Reserve raised interest rates. New York-based Signature Bank failed just days later under similar circumstances, while San Francisco-based First Republic Bank also appeared on a path toward collapse until big banks like JPMorgan Chase, Citigroup, Bank of America and Wells Fargo announced they’d make $30 billion in deposits in an attempt to rescue the beleaguered bank. First Republic’s stock has continued to crater, though—declining more than 87% in recent weeks—and it has reportedly reached out to JPMorgan Chase to explore a potential sale. SVB and Signature had far different client bases than most American banks, though, with Signature focused on crypto and SVB aligned with tech startups that largely had high-dollar accounts—about 93% of SVB’s deposits were above the traditional $250,000 per account the FDIC insures, a far greater proportion than most banks.

Tangent

The FDIC has set a deadline of 8 p.m. Wednesday for prospective buyers to submit bids to buy SVB (the Treasury Department took control of the bank after it collapsed). The deadline has been delayed several times, however, and it’s unclear if a buyer will emerge Wednesday evening.