FDIC and First Republic Bank

[AndySoCal]

Here is a link to an interesting article

https://www.msn.com/en-us/money/companies/fdic-says-supervisors-could-have-been-more-aggressive-befo... 

[CreditCuriosity]

Poorly ran bank along with Silicon valley bank with lack of even head of risk department at least at silicon valley bank.  Bad choices and when interest rates went up the US Taxpayer was on the hook for above the 250k limit and they went out the window and now set precedence for risky behavior to happen again.  Gotta pay those favor back and they certainly did.

[Anonymalous]

I think the second half of the first sentence is more important than the first: "U.S. banking regulator said its supervisors could have been more aggressive in policing First Republic Bank's risk management prior to its May failure, but it was unclear if that would have saved the bank in the face of the unexpected speed that depositors pulled their money." (Emphasis mine.)

It sounds like the regulators stretched as far as they could to place the blame on the bank, but they were forced to implicitly admit the real problem is the system itself. Fractional reserve banks are inherently insolvent, so a large enough bank run can destroy any of them.

[AndySoCal]

First Republic Bank was a victim of there own business strategies in a way.  The bank was catering to rich as and a result of this had  a very high level of uninsured deposits. Here is a link to article which has the percentages

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/svb-signature-rac... 

 First Republic depositors saw what happened at SVB depositors left after understanding how much of their money was uninsured.  SVB and First Republic showed the regulators how fast a bank can fail in the modern age of technology.  All banks and credit unions have a certain percentage of their accounts that are uninsured.  SVB and First Republic Bank failures have sent very clear messages accross the banking system.