What went wrong at First Republic Bank
The collapse of First Republic and SVB reveal major flaws in the way regional banks are regulated.
When the FDIC seized regional bank First Republic this morning and put it into receivership before selling its assets to JPMorgan Chase, it marked the third failure of a regional bank in the past two months, following the collapse of Silicon Valley Bank and Signature Bank in March. These represent three of the four biggest bank failures in U.S. history, and in all of these cases, the FDIC and other government regulators have ensured that none of the depositors in these banks would lose any money (even though FDIC deposit protection applies only to accounts of $250,000 or less).
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