Description

The First Republic Collapse: Systemic Causes & Cures

We discuss the recent collapse of First Republic Bank, its systemic, institutional causes, and what could be done to resolve these issues overnight.

Notes:

• Analysis: U.S. banks face trillion-dollar reverse repo headache https://www.reuters.com/business/finance/us-banks-face-trillion-dollar-reverse-repo-headache-2022-08-02/
• First Republic, he added, "lost so much in deposits, they have to replace that funding somehow, so they're doing it with borrowing." The borrowing will "really weigh on their profitability both in the reported quarter and going forward." https://finance.yahoo.com/first-republic-stock-plummets-49-after-revealing-deposit-exodus-in-march-133338066.html
• "Following the recent industry developments, net interest income and net interest margin were, and continue to be, materially impacted due to the unprecedented loss of deposits resulting in higher funding costs."
  https://www.businesswire.com/news/home/20230424005719/en/First-Republic-Reports-First-Quarter-2023-Results
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