The banks were all cartering to the tech industry which has had massive lay-off since the pandanmic subsided….
First Republic Bank was seized by federal regulators early Monday and sold to JPMorgan Chase Bank. The San Francisco-based bank became the third to fail this year, joining Silicon Valley Bank and Signature Bank, that collapsed in March. The three ranked among the top 30 U.S. banks by assets last year, but are far smaller than the country’s biggest financial institutions, which measure their assets in the trillions.
The three banks catered to the technology industry, which have retreated from the enormous growth of the early pandemic era and are now beset with layoffs. First Republic served the tech industry and had a wealthy clientele. Silicon Valley Bank was crucial to venture capital firms. Signature served as a key financial institution for the cryptocurrency industry. Like SVB, First Republic’s investments created huge losses as interest rates rose.
The failures of SVB, Signature and First Republic mark three of the four largest failures of a federally insured bank ever. The largest, Washington Mutual, crashed at the start of the Great Recession in 2008. Since 2001, more than 500 banks have failed, but the vast majority were in the wake of the Great Recession, Federal Deposit Insurance Corp. data shows.
Recent bank failures have paled in comparison to today’s closures. Two banks that failed in the fall of 2020 totaled just over $200 million. At the end of March, First Republic had nearly $200 billion in assets….