On March 12, New York regulators shut down Signature Bank, which was focused on cryptocurrency customers, in an effort to stem a burgeoning banking crisis sparked by the SVB’s failure. Two days later, US regulators shut down SVB, a well-known lender to technology start-ups and venture capital firms in the San Francisco Bay Area. The crisis started on March 8 when Silvergate Capital Corporation, a bank with a concentration on cryptocurrency, declared plans to voluntarily liquidate itself after suffering losses following the collapse of crypto exchange FTX. The current regional banking crisis was caused by a number of factors, including rapidly rising interest rates (resulting in large declines in the market value of Treasury bonds and government-backed mortgage securities held by regional banks), high levels of uninsured deposits, regulatory rollbacks, and lax supervision by the US Federal Reserve. The three recently failed banks together held assets of $532 billion, surpassing the $526 billion (when adjusted for inflation) owned by the 25 banks that failed in 2008. First Republic, SVB, and Signature Bank are currently the second, third, and fourth largest bank failures in US history, respectively, after Washington Mutual, which went bust during the 2008 global financial crisis and was also acquired by JPMorgan. The last two months witnessed three of the four largest bank failures in US history. Since early March, troubles have been brewing in the regional banking sector with the collapse of Silicon Valley Bank (SVB) and Signature Bank with astounding speed. The FRB also gifted green umbrellas and served “ freshly baked cookies” to its customers in its upscale branches. First Republic was not a typical mid-sized American bank, as it offered wealth management and brokerage services almost exclusively to affluent clients. Despite obtaining a $30 billion lifeline from 11 of the country’s largest banks in mid-March, the FRB failed.įounded in 1985 and based in San Francisco, the FRB was the 14th largest US bank with total assets of $229 billion and total deposits of $104 billion as of April 13, 2023. On May 1, 2023, US regulators seized troubled First Republic Bank (FRB) and promptly sold all of its deposits and most of its assets to the country’s biggest bank, JPMorgan Chase, in a bid to stem further turmoil in the banking sector.

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