cancel
Showing results for 
Search instead for 
Did you mean: 

FDIC and First Republic Bank

AndySoCal
Valued Contributor

FDIC and First Republic Bank

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... 

FICO Scores XPN v8 802 V2 831 (SDFCU) TUC 803 v8 EFX 807 (10/2023)
Discover 09/90 19,000, JCPenney 10/2008 4,700 US Bank Cash+ 12,000 Citibank Custom Cash 5/2015 11,100 Capital One/Walmart 3/2022 3,000 SDFCU 15,000 06/2023 Banking relationships Discover Bank and Lafayette FCU Quorum FCU State Department FCU

Message 1 of 4
3 REPLIES 3
CreditCuriosity
Moderator Emeritus

Re: FDIC and First Republic Bank

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.

Message 2 of 4
Anonymalous
Valued Contributor

Re: FDIC and First Republic Bank

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.

Message 3 of 4
AndySoCal
Valued Contributor

Re: FDIC and First Republic Bank

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.

FICO Scores XPN v8 802 V2 831 (SDFCU) TUC 803 v8 EFX 807 (10/2023)
Discover 09/90 19,000, JCPenney 10/2008 4,700 US Bank Cash+ 12,000 Citibank Custom Cash 5/2015 11,100 Capital One/Walmart 3/2022 3,000 SDFCU 15,000 06/2023 Banking relationships Discover Bank and Lafayette FCU Quorum FCU State Department FCU

Message 4 of 4
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.