Another Bank Goes Bust

The Takeaway

WNYC and PRX

Politics, Wnyc, Daily News, Radio, Takeaway, National, News, News Commentary

4.6 • 716 Ratings

🗓️ 5 May 2023

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

Original Air Date: May 02, 2023 On Monday, another multi-billion dollar banking institution collapsed — First Republic Bank. Wealthy investors had been pulling out billions of dollars in deposits over the past few weeks, in a 21st-century digital run on the bank. Federal regulators seized its assets, covered $13 billion in losses, and sold it off to JPMorgan Chase. This is now the second-largest bank failure in American history, and the third significant bank failure of the past two months after Silicon Valley Bank and Signature Bank. We discuss how this happened and what it means for the U.S. economy with Aaron Klein, Miriam K. Carliner Chair and senior fellow in Economic Studies at the Brookings Institution.

Transcript

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0:00.0	Hey, it's Latif from Radio Lab.
0:02.0	Our goal with each episode is to make you think, how did I live this long and not know that?
0:09.6	Radio Lab, adventures on the edge of what we think we know.
0:13.0	Listen, wherever you get podcasts.
0:25.3	Welcome back to The Takeaway. I'm Melissa Harris-Perry.
0:30.0	This week, a multi-billion dollar banking institution collapsed.
0:35.8	Wealthy investors had been withdrawing deposits from First Republic Bank over the past few weeks in what has been described as a 21st century digital
0:38.7	run on a bank. Federal government regulators seized the bank's assets on Monday and sold it to
0:45.2	J.P. Morgan Chase. This is now the second largest bank failure in American history. And if you feel
0:52.5	like you've heard this story before, it's kind of because
0:55.9	you have. Another American bank has failed. Just this morning, financial regulators in California
1:02.3	seized First Republic Bank after it lost $100 billion in deposits just in March. Yeah, folks,
1:09.7	this is the third major bank failure in the past two months.
1:14.0	With me now to help us unravel.
1:15.8	This unraveling is Aaron Klein, the Miriam K. Carliner Chair and Senior Fellow in Economic
1:22.1	Studies at the Brookings Institution.
1:24.4	Welcome back to the takeaway, Aaron.
1:25.9	It's a pleasure to be back.
1:27.2	What is happening?
1:29.0	Well, it's the same thing that's happening. America has over 9,000 banks and credit unions.
1:34.8	A couple of them made some mistakes, right? Both First Republic and Silicon Valley Bank,
1:41.2	the two larger ones, kind of made the same mistake, which was they bet interest
	...

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