SVB, now First Republic: How it all started

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 2 May 2023

⏱️ 10 minutes

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Summary

The turmoil in the banking industry isn't over yet. Today, First Republic Bank was seized, following the failures of Signature Bank and Silicon Valley Bank back in March. How did we get here? And how do we prevent banks from failing in the future? A show-stopping mea culpa from the Federal Reserve provides some answers.

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Transcript

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0:00.0	NPR.
0:11.6	This morning at 3.28 a.m. Eastern, a press release came out saying that the bank First
0:17.0	Republic had been seized by authorities and sold to JP Morgan. First Republic's assets
0:23.0	were even larger than that of Silicon Valley Bank, whose failure and march accelerated First
0:28.5	Republic's troubles.
0:29.5	And this is everyone asking, how did we get into this mess? People like Columbia Law
0:36.1	Professor Catherine Judge.
0:37.9	The situation is temporarily contained, but it has opened up a host of questions about
0:45.2	the adequacy of our bank regulatory and bank supervisory framework.
0:50.3	On Friday, there were a bunch of reports released about the failures of SVB and signature
0:54.8	bank. The key one, though, the one that really gave a thump when you slammed it on the
0:58.8	table was the Federal Reserve's review into Silicon Valley Bank. And it's a shocker.
1:04.8	Just makes the further core ball. And so they're busy coming out saying, look, all of these
1:07.8	other banks are safe and sound. But they've managed to simultaneously kill their own credibility.
1:13.1	This is the indicator from planet money. I'm Whalen Wong.
1:15.9	And I'm Diane Woods. To learn the show, what went wrong leading up to the collapse of Silicon
1:20.5	Valley Bank. We're piecing together what sparked this banking mess. And what could be done
1:26.2	differently to stop more banks failing?
1:34.1	Support for NPR and the following message come from Indeed. If you're a business owner,
1:38.7	you'll love Indeed. Attract, interview and hire in one place. Indeed.com slash indicator.
1:44.4	Terms and conditions apply. Cost-per-application pricing not available for everyone.
1:50.0	Business and the US are regulated by a suite of laws and they're supervised by a patchwork of
	...

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