{"id":572672,"date":"2023-05-01T23:48:33","date_gmt":"2023-05-01T20:48:33","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank\/"},"modified":"2023-05-01T23:48:33","modified_gmt":"2023-05-01T20:48:33","slug":"first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank\/","title":{"rendered":"#First Republic fallout: Democrats fume as regulators bail out yet another failed bank"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3dd223c09a8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3dd223c09a8\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank\/#A_growing_to-do_list_for_lawmakers\" >A growing to-do list for lawmakers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank\/#Were_not_out_of_the_woods_yet\" >We\u2019re not out of the woods yet<\/a><\/li><\/ul><\/nav><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/03\/warrenelizabeth_brownsherrod_030723gn01_w.jpg?w=900\" \/><\/p>\n<div>\n<p>Democrats are banging a gong about the need for greater regulation of the U.S. financial sector following the combined public and private-sector rescue of California-based First Republic Bank.<\/p>\n<p>The San Francisco-based regional powerhouse is the third major U.S. bank to fail and prompt a government-administered bailout of depositors following the collapse of Silicon Valley Bank (SVB) and Signature Bank in March. It is the second-largest bank collapse in U.S. history, eclipsing SVB.<\/p>\n<aside class=\"ad-unit ad-unit--mr1_ab\"><\/aside>\n<p>While Democrats aren\u2019t arguing that the Biden administration should have let First Republic fail, many are concerned that the current spate of bank rescues point to financial stability concerns.<\/p>\n<p>\u201cFirst Republic Bank\u2019s risky behavior, unique business model, and management failures led to significant problems, and it\u2019s clear we need stronger guardrails in place. We must make large banks more resilient against failure so that we protect financial stability and ensure competition in the long run,\u201d Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said in a statement on Monday morning.<\/p>\n<p>Cleaning up First Republic\u2019s collapse will cost the FDIC roughly $13 billion from the Deposit Insurance Fund (DIF), a pool of money funded by bank fees that exists to protect deposits. The FDIC already t<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed $22.5 from the DIF to handle the collapses of SVB and Signature in March, though the fund had roughly $128 billion in it at the end of 2022. <\/p>\n<p>JPMorgan Chase will also receive a $50 billion in fixed-rate financing as it takes on First Republic\u2019s assets, outstanding loans and deposits in the form of a promissory note, a representative for the FDIC told The Hill.<\/p>\n<p>Sen. Elizabeth Warren (D-Mass.), a fierce critic of big banks, emphasized that the FDIC bailout of First Republic once again puts taxpayer money on the line. That\u2019s after $25 billion was used from the Treasury\u2019s Exchange Stabilization Fund to backstop a loan for the rescue of depositors at Silicon Valley Bank in March.<\/p>\n<p>\u201cThe failure of First Republic Bank shows how deregulation has made the too-big-to-fail problem even worse. A poorly supervised bank was snapped up by an even bigger bank\u2014ultimately taxpayers will be on the hook. Congress needs to make major reforms to fix a broken banking system,\u201d she wrote online on Monday.<\/p>\n<aside class=\"ad-unit ad-unit--mr2_ab\"><\/aside>\n<p>Other top Democrats on financial committees defended the actions of the Biden administration while also encouraging banking sector reforms.<\/p>\n<p>\u201cThis prompt and cost-effective sale of the bank protects depositors, limits contagion, and ensures that no cost is borne to our nation\u2019s taxpayers,\u201d Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, said in a statement on Monday.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_growing_to-do_list_for_lawmakers\"><\/span>A growing to-do list for lawmakers<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>First Republic\u2019s failure comes as lawmakers and regulators are still investigating the collapses of SVB and Signature banks.<\/p>\n<aside class=\"ad-unit ad-unit--mr3_ab\"><\/aside>\n<p>\u201cYou have got to blame the regulators,\u201d House Financial Services Committee member Rep. Brad Sherman (D-Calif.) told The Hill in an interview. \u201cIf anybody should appreciate interest rate risk, it\u2019s the people who push the interest rates up.\u201d<\/p>\n<p>Waters also noted reports released Friday by the Federal Reserve and Government Accountability Office (GAO) that found both Fed regulators and bank managers were to blame for the collapse of venture capital repository Silicon Valley Bank and cryptocurrency-focused Signature Bank.<\/p>\n<p>\u201cThese developments coupled with the reports we received from the Federal Reserve, FDIC, and GAO on recent bank failures also underscore the need for Congress and regulators to strengthen regulation and supervision of regional banks,\u201d she said.<\/p>\n<aside class=\"ad-unit ad-unit--mr4_ab\"><\/aside>\n<p>The frustration over yet more bank failures and government caretaking wasn\u2019t limited to Democrats on Monday. Republicans and even a regulator at the FDIC bemoaned the country\u2019s \u201cbailout culture.\u201d<\/p>\n<p>\u201cWe should plan for those bank failures by focusing on strong capital requirements and an effective resolution framework as our best hope for eventually ending our country\u2019s bailout culture that privatizes gains while <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">social<\/a>izing losses,\u201d FDIC board member Jonathan McKernan wrote in a statement on Monday.<\/p>\n<p>\u201cBank failures are inevitable in a dynamic and innovative financial system,\u201d McKernan said.<\/p>\n<aside class=\"ad-unit ad-unit--mr5_ab\"><\/aside>\n<h2><span class=\"ez-toc-section\" id=\"Were_not_out_of_the_woods_yet\"><\/span>We\u2019re not out of the woods yet<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Experts are cautioning that the period of bank failures may be far from over and that its effects upon the wider economy, specifically through credit conditions, may not yet be fully understood. The Fed itself issued a similar warning in March after the most recent meeting of its interest rate-setting committee.<\/p>\n<p>\u201cAs all too few of us predicted in early March, the ongoing concentration of U.S. banking into a few one-size-fits-all Wall Street institutions continues apace, with our largest banking conglomerate \u2013 JP Morgan Chase \u2013 now having purchased yet another large regional bank on the cheap with federal assistance,\u201d Robert Hockett, a professor of law and public finance at Cornell Law School, wrote in an analysis.<\/p>\n<p>\u201cContrary to cheery Wall Street and Washington predictions made over the weekend, this is not \u2018the end of the March banking crisis\u2019 \u2013 it is still the beginning,\u201d he wrote.<\/p>\n<aside class=\"ad-unit ad-unit--mr6_ab\"><\/aside>\n<p>What the purchase of First Republic means for the future of the banking industry and whether the big banks will simply be allowed to get bigger is also uncertain.<\/p>\n<p>\u201cThe fact that the most gigantic U.S. bank was needed to bail out a large bank kills a lot of hopes and plans. Since the 2008 financial crisis regulators have tried to prevent the biggest banks from becoming more dominant,\u201d analysts with policy research firm Capital Alpha Partners wrote in a Monday analysis.<\/p>\n<p>\u201cJPMorgan never would have received regulatory approval to purchase a healthy bank of First Republic\u2019s size. JPM will now get bigger due to its role of savior of last resort.\u201d<\/p>\n<\/div>\n<p>Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.<\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thehill.com\/business\/3982091-first-republic-fallout-democrats-fume-as-regulators-bail-out-yet-another-failed-bank\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Democrats are banging a gong about the need for greater regulation of the U.S. financial sector following the combined public and private-sector rescue of California-based First Republic Bank. The San Francisco-based regional powerhouse is the third major U.S. bank to fail and prompt a government-administered bailout of depositors following the collapse of Silicon Valley Bank&#8230;<\/p>\n","protected":false},"author":1,"featured_media":572673,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/thehill.com\/wp-content\/uploads\/sites\/2\/2023\/03\/warrenelizabeth_brownsherrod_030723gn01_w.jpg?w=1280","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[141254,141883,134417,142839,139252,134418,139529,77105,141430,141431,133498,40445,115,136339,141971,134345],"class_list":["post-572672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-signature-bank","tag-2023-banking-crisis","tag-blog-briefing-room","tag-brad-sherman","tag-business-economy","tag-congress-blog","tag-defense-national-security","tag-elizabeth-warren","tag-federal-deposit-insurance-corporation","tag-first-republic-bank","tag-in-the-know","tag-media","tag-news","tag-sherrod-brown","tag-silicon-valley-bank-failure","tag-state-watch"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/572672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=572672"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/572672\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/572673"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=572672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=572672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=572672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}