Following the second largest bank failure in U.S. history, First Republic Bank has been sold to J.P. Morgan. CNBC Senior Markets Correspondent Dominic Chu, NBC News White House Correspondent Monica Alba, and Wall Street Journal Chief Economics Correspondent Nick Timiraos join Andrea Mitchell to react. “We had an earthquake when Silicon Valley Bank failed in mid March, and earthquakes can destabilize other buildings, they can weaken other buildings around the epicenter of that quake, and that’s what happened here,” says Timiraos. “When they reported earnings last week, and they made clear the extent of just how much money had gone out the door, after the failure of SVB, people began to say ‘wait a minute, is this bank really viable?’”
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LEARN MORE ABOUT: Bank Failures
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The financial industry was rocked recently by the news of the First Republic Bank and SVB failures. These two banks are among the most highly respected and trusted financial institutions in the United States, and their collapse has sent shockwaves throughout the country.
The First Republic Bank failure was particularly surprising, as the bank had been seen as one of the most stable and well-managed banks in the industry. However, it appears that the bank was destabilized by a seismic financial event that originated elsewhere in the industry – specifically, the SVB failure.
Nick Timiraos, a respected financial journalist and analyst, has been closely following these events and has provided valuable insight into what caused the failures and what their implications might be for the broader financial system.
According to Timiraos, the SVB failure had a domino effect on the wider financial industry. The bank’s collapse sent shockwaves through the market, causing other banks to rethink their positions and make hasty decisions. This in turn put pressure on the First Republic Bank, causing it to buckle under the strain and ultimately fail.
The SVB failure was caused by a variety of factors, including a combination of bad loans, poor risk management, and a lack of oversight by regulators. However, the deeper issue at play here is the structural instability of the financial system itself. As Timiraos explains, the current system is highly interconnected, with a large number of banks and financial institutions relying on each other for support and stability.
When one bank fails, it can trigger a chain reaction that destabilizes the entire system. This was certainly the case with the SVB and First Republic Bank failures, and it underscores the need for greater oversight and regulation in the financial industry.
Fortunately, there are steps that can be taken to address these issues. First and foremost, regulators need to take a more proactive approach to identifying and addressing risk in the financial industry. This means improving oversight and increasing transparency, so that both regulators and investors have a better idea of what’s going on.
Additionally, banks and other financial institutions need to be more accountable for their actions. This means taking responsibility for their mistakes, rather than shifting the blame to others or trying to hide their failures.
Ultimately, the SVB and First Republic Bank failures have highlighted some of the deep-seated issues in the financial industry, but they have also provided an opportunity for change. By taking a more proactive approach to oversight and accountability, regulators and financial institutions can work together to build a more stable and resilient financial system for the future.
Is this a good time to buy stocks/crypto in the Europe? I know everyone is saying stocks are at a discount and all, but just how long will It take for us to recover, obviously there are strategies to manoeuver in this present market but these strategies doesn't come common to the average folk, or am I better off putting my money elsewhere.
Please get Andrea a proper mic so we can decipher her speech.
America's banks will continue to fail, because the U.S. government refuses to give reparations to the Black American people. And as such money continues to go to Ukraine for war, even as in ancient Egypt whereas Pharoah refused to let the people of God leave, today's modern American Pharoahs/Babylonians also want a racially based poor class to grow on. Do the right thing and give the reparations for slavery, or continue to slide into the abyss! It will be what it will be.
I thought after the great recession, everyone including the government said never again. Some improvements definitely need to be made because this is not ok.
The people protesting outside the supreme court judges houses are originally from Sweden, the Caribbean, Norway, Britain, Holland and Germany. All new arrivals into our country.!!!!!
Being able to provide all my needs without the help of the Government is really a dream come through and I’m getting $50,000 returns from my 10k investment
Shhh nothing to see here
Trump bank failure 0. Biden bank failure 3 so far.
Why First Republic failed. Are other banks to follow? Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom:
Here's the hypocrisy in this, if this happened under Trump Democrats would be protesting in the streets, where are you now?
Bidens America is collapsing
Taxpayers get ready to taking in the ace. Thanks Jose Biden the illegal alien POTUS
Let them fail or you will make it worse and collapse the whole economy. Of course that is what Biden wants so start growing your own food and buy plenty of ammo, going to get ugly.
Another Biden failure
So how much money did the CEO of this bank and all his fellow compadres? What did they get as bonuses and where did they go on vacation so they can get bailed out?
I just have one question. Did the bank officers ‘Approve their own corporate Bonus’? (After having knowledge of the financial collapse, Similar to Silicone Valley Bank.). I do understand that the DNC has a lot of supporters in Silicon Valley. I’m sure it’s the same for the New York companies.
Maybe if First Republic had invested more in their diversity, equity and inclusion department this wouldn't have happened.
Biden is a failure.
“We have to let bankers, legitimate people, go back to being bankers. You want to build a business, you have to be able to borrow money. And we're gonna put you back in that position. We have to get rid of Dodd-Frank." – t'rump in 2016 before he repealed Dodd-Frank in 2018
This is what happens when you lift a lot of the banking checks that were in place.
So did the Gov "make a deal with JP Morgan Chase" To take over FIRST Republic, OR WAS IT "An auction was held" ??? You can't have both… Either we have socialism command and control for the top 1% and rest of us have capitalism, or we are all under capitalism. BTW even if an auction doing so on a SUNDAY, without the normal processes and notifications able to even be reviewed is not a good idea.
Joe Biden is screwing us again! Starting today, homebuyers with good credit will have to pay MORE in mortgage fees – and people will poor credit will get to pay less! Just the opposite of how it has worked for decades – all to subsidize people with poor credit! THIS IS REMINISCENT OF THE 2009 MORTGAGE COLLAPSE WHEN BANKS WERE FORCED TO LEND TO PEOPLE WITH POOR CREDIT! IT BROUGHT DOWN THE ECONOMY AND LED TO THE GREAT RECESSION! THE ONLY WAY TO STOP THIS OUTRAGEOUS SOCIAL ENGINEERING IS TO VOTE THE DEMOCRATS OUT! (I'm not a Republican and I voted for Schumer twice).
Funny how no banks did this under Trump? the Democrats are ruining America–> Exhibit A:
First Republic Bank
As Joe Biden's new slogan is finish the job yeah destroy America systemically! Along with his evil supporters he will probably win the next election and then Michelle Obama can finish the job along with her evil hubby
Biden destroyed another bank with his failed Built Back Better.
That massive payout to the people in March 2021 looks worse and worse. Gee, keep giving away money and to heck with inflation.
Corrupt fascist Bidens plan, collapse America, get with, bail out banks to control your spending. Take your 401k and invest it in his ESG bs attacking those millionaire waitresses tips, now, 87000 armed IRS agents. Isnt Fascism great
Has the 'Biden Recession' started yet or has he redefined 'recession' again?
We see another bank failure out of the Biden administration that early on we all had so much hope for. If all this happened during a Republican administration, our hair would be on fire and we would be demanding congressional investigations. We would demand those responsible should be subject to indictment. Bank failures lead the way in 2008 to the economic crash that we all suffered at that time. Even know some economists are beginning to whisper about the possibility of a Biden depression.
As the Democrats we had the roadmap to energy and economic stability but sadly Joe folded up the roadmap and put it in the glove compartment as he drove the car off the cliff. We can still turn things around, but it’s going to be a long and hard road And we are going to have to do things we don’t want to do. I doubt if we have the ability to turn things around.
So let it go under.
FUNNY THAT THOSE BLAMING BIDEN ALWAYS SKIP THE PART WHERE IT WAS TRUMP'S ADMIN WHO ALLOWED AND EXEMPTED THESE SMALLER BANKS FROM OVERSIGHT CREATED BY OBAMA POST 2008 CRASH.
Let me guess this is also Trump's fault. Come on snowflakes cry for me.