Amid movement in Washington to enact tighter regulation of financial companies, recent surveys offer a warning to executives in that sector: Don’t bank on public support for your industry.
One underlying reason for this is reflected in a Rasmussen Reports poll conducted last week: a majority of respondents said they’re “not very confident” (43 percent) or “not at all confident” (11 percent) about “the stability of the U.S. banking industry today.” On a more personal level, one-third said they’re either “very worried” (8 percent) or “somewhat worried” (24 percent) that money they’ve deposited “will be lost due to a bank failure.”
A report issued this month by Gallup, reviewing the firm’s polling over the years, carried the headline “Americans’ Confidence in Banks Remains at Historical Low.”
As recently as 2004, just over half of Gallup’s respondents expressed “a great deal” or “quite a lot” of confidence in banks. By last month, the figure had fallen to 20 percent, barely above where it was last April (18 percent), when the whole financial system looked to be on the verge of collapse. The one bit of good news is that people are more apt to have confidence in their own bank. When asked about “your primary or main bank,” 58 percent in last month’s poll voiced a great deal/quite a lot of confidence in it.
Whatever esteem consumers have for their own bank, though, it isn’t enough to keep many from favoring tighter regulation of the financial industry in general – even though support for “bigger government” in general has been on the skids. In Pew Research Center polling on the topic last month, 61 percent of respondents said it would be “a good idea” for the government “to more strictly regulate the way major financial companies do business,” vs. 31 percent calling it “a bad idea.”
A separate Gallup survey, conducted this month, offers a revealing indication of the degree to which “Wall Street” is an unloved brand name these days. Half of the poll’s respondents were asked whether they favor or oppose giving the federal government new powers “to regulate large banks and major financial institutions.” On this question, respondents split almost evenly: 46 percent in favor, 43 percent against and the rest declining to choose.
People in the other half of this Gallup survey’s sample were asked whether they support or oppose new federal powers to regulate “Wall Street banks.” With this wording used, 50 percent were in favor and 36 percent opposed, with the rest declining to pick. In other words, the net pro-regulation response went from 3 percentage points to 14 percentage points when the words “Wall Street” were used in the question.
Last year’s federal bailout of financial-sector companies still rankles with people, and all the more so since many don’t believe it was even necessary. In a CBS News/New York Times survey this month, just 17 percent agreed that the bailout “was necessary to get the economy out of recession,” while 74 percent instead agreed that “the economy probably would have improved without doing that.”