Customers Urged To Remain Calm After First Republic Collapse

Tuesday, May 2, 2023 | Tag Cloud

By Stefan J. Bos, Chief International Correspondent Worthy News

NEW YORK, USA (Worthy News) – Worried customers were urged Tuesday to remain confident in the U.S banking system after First Republic became the second-largest bank to fail in American history.

On Monday, Government regulators seized and sold off First Republic Bank to JPMorgan Chase for $10.6 billion in a stunning disintegration of the San Francisco-based bank.

First Republic was the third bank to fail in America this year after Silicon Valley Bank and Signature Bank collapsed in March.

The three banks held a total of $532 billion in assets. That’s more than the $526 billion, when adjusted for inflation, owned by the 25 banks that collapsed in 2008 at the height of the global financial crisis.

Yet First Republic Bank’s shaky deposit footing and dismal earnings report won’t trigger the chain reaction that investors fear, claimed Jim Cramer, a U.S. market commentator, and former hedge fund manager.

Unlike other bank failures, including Silicon Valley Bank’s recent collapse, First Republic’s troubles have stemmed mainly from its inability to save itself, even with a multi-billion dollar lifeline from other major banks, he told CNBC television.

“There’s one big difference between now and 2008: This time, there is no systemic contagion,” Cramer added. “It’s a miserable moment for First Republic — once a bank beloved by the rich and famous — but it’s an all-clear event for everyone else.”


There were similar calls for calm across the pond in Europe, where troubled Swiss giant Credit Suisse, a major global player, is being taken over by rival UBS in a forced rescue deal costing 3 billion Swiss francs ($3.3 billion).

Britain’s finance ministry said the country’s banking system remained safe, sound, and well-capitalized after First Republic Bank became the third major U.S. bank to fail in two months.

“As the independent Bank of England has confirmed, the UK banking system remains safe, sound, and well capitalized,” a spokesperson for the Treasury said.

The spokesperson also said First Republic was “a matter for U.S. authorities.”

The timing was perhaps crucial as the worldwide May 1 Labor Day holidays limited initial global market reactions to the announcement.

But with more banks under pressure, it was unclear whether the words of leading analysts and government officials would be enough to calm investors and other bank clients.

We're being CENSORED ... HELP get the WORD OUT! SHARE!!!
Copyright 1999-2023 Worthy News. All rights reserved.

If you are interested in articles produced by Worthy News, please check out our FREE sydication service available to churches or online Christian ministries. To find out more, visit Worthy Plugins.

Worthy Christian News