From New York Times, I'm Michael Bavaro. This is a Daily.

On Monday morning, the federal government took over a third failing bank. This time,

first republic. Today, I speak with my colleague, Gina Smiley, about whether we're at the end

of this banking crisis or the start of a new phase of financial pain.

It's Tuesday, May 2nd.

So, Gina, another day, another bank failure.

Studying to be the pattern these days.

Very much. And after these two banks had failed, Silicon Valley Bank, then a couple days later,

signature bank, the hope, and I'd say the expectation, was that this crisis might be over.

It was not over. In fact, a third bank, first republic bank collapsed, and it was even bigger

as a bank than the previous two that failed. So, tell us about why first republic bank ultimately went under.

I think that what happened at first republic was sort of a slow motion reaction to what happened at Silicon Valley Bank,

that first bank that failed. So, Silicon Valley, as your member, had planned pretty poorly for rising interest rates.

It had to sell a bunch of investments that had lost value as interest rates rose, and that spooked customers.

So, the customers pulled out their money in droves, and that really caused its problems.

So, it failed. Signature bank, another bank in that sort of mid-sized region, which also had similar to Silicon Valley Bank,

some exposures to interest rates, and a lot of customers over the $250,000 federal deposit insurance limit.

Also collapsed a few days later.

Right, and just to remind people why that $250,000 number matters, that's the point at which if you fear your bank might fail,

you're very worried about that money you should pull it out, is the thinking, which actually becomes a self-reinforcing cycle that leads to a run on a bank.

Yeah, exactly. If you have deposit under $250,000 said a bank, you don't really care if the bank fails,

because the federal government is going to ensure that, like, your money's good.

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