As the collapse of Silicon Valley Bank and two other banks roiled markets earlier this week, the Biden administration’s decision to step in and cover all of the failed banks’ deposits has generated criticism from populist voices on the right and left who decried the move as “bailout,” a word often associated with political heartburn. But while a new Morning Consult survey finds that most voters also see it that way, they are nonetheless supportive of the federal government’s move.
Majority of Voters Support Federal Government’s Bank Rescue Plan, Despite Seeing It as a ‘Bailout’
How voters across the partisan spectrum view the federal response to the Silicon Valley Bank failure
- Most Democrats (79%) and independents (57%) said they support the Biden administration’s move to implement an emergency investment fund to ensure that all deposits at Silicon Valley Bank, Signature Bank and Silvergate Capital Corp., will be covered. Republicans, meanwhile, were split, with 40% in favor and 43% opposed.
- At 74%, Republicans were also the most likely to say that the Biden administration’s moves constituted a bailout, though 52% of Democrats and 62% of independents agreed.
- News of Silicon Valley Bank’s collapse reached most voters: 63% said they had heard at least something about the failure of SVB, though fewer said the same of the collapse of Signature Bank (52%) and Silvergate Capital (36%).
Voters Most Likely to Blame Silicon Valley Bank Brass for Its Failure
Voters mostly blame SVB management for its collapse
- While media coverage from the fallout of Silicon Valley Bank’s collapse has pointed the blame in a few directions, voters across the partisan spectrum were in agreement that the bank’s management is responsible for the failure of SVB, with 38% of Democrats and 37% of both Republicans and independents laying blame there.
- The Federal Reserve, which announced a review of the central banking system’s oversight of SVB, has also come in for heavy criticism, especially from liberal lawmakers and pundits. However, it has largely escaped blame by voters, with just 6% of Democrats, 4% of Republicans and 3% of independents saying the Fed is most responsible.
- Voters were more likely to blame the Biden administration (11%), with Republicans nearly five times as likely as Democrats to see blame there.
“Bailout” politics and the Biden administration’s changing tack on a rescue plan
The Biden administration appears keenly aware of the bad taste left over from the bailout of banks during the 2008 financial crisis. As panic swept the tech industry and broader markets after Friday’s failure and regulator takeover of SVB, Treasury Secretary Janet Yellen said the administration would not bail the banking industry out again. Behind the scenes, President Joe Biden also reportedly scoffed at any prospect of a bailout.
A weekend tech tantrum and the increasing threat of bank runs pushed the administration to consult with top brass at big banks and suddenly reverse course, with the Treasury, Federal Reserve and Federal Deposit Insurance Corp. making a joint statement late Sunday that all deposits, even those above and beyond the usual FDIC limit of $250,000, would be made whole. The Treasury also announced it would provide $25 billion to back loans to banks struggling to meet liquidity needs as part of the Fed’s “Bank Term Funding Program,” which the administration hopes will be seen as a move to support banking customers and not as an industry “bailout.”
The Morning Consult survey was conducted March 13-15, 2023, among a representative sample of 1,987 registered voters, with an unweighted margin of error of plus or minus 2 percentage points.