Banking Crisis 2023

President Joe Biden said on Monday that he's called on Congress "to give regulators the tools to hold banking executives accountable."

First Republic Bank was shuttered by regulators early Monday, and all its deposits and most of its assets were acquired by JPMorgan. San Francisco-based First Republic was undone by low-rate mortgages it made to its wealthy customers as well as by the fallout from last month's banking crisis.

Bank groups say the focus on capital rules in Federal Reserve Vice Chair for Supervision Michael Barr's report on Silicon Valley Bank are misguided. Others say he should have named names.

About $2.9 billion of the deposits the company obtained from the failed Signature Bank had fled as of last week, and executives are forecasting that number to double. However, they say they're "cautiously optimistic" they can lure some deposits back.

The Federal Deposit Insurance Corp. said in a report released Friday that Signature's rapid, unrestrained growth and inadequate risk management practices outpaced supervisors' ratings and responses, even though the issues were known to the agency.

In a highly anticipated report on the failure of Silicon Valley Bank, Federal Reserve Vice Chair for Supervision Michael Barr says the bank's own mismanagement and an acquiescent supervisory structure created the conditions for the bank to fail.

The Government Accountability Office said that  the Federal Reserve Bank of San Francisco flagged problems at Silicon Valley Bank as early as 2018.

The troubled lender could fail, get rescued by the nation's largest banks or muddle through as a zombie bank. Federal regulators and the big banks will have to decide which is the least bad option.

Even as First Republic Bank has sunk deeper into crisis this week — falling as much as 49% on one day alone — shares of many of its peers, including names like PacWest Bancorp and UMB Financial, have mostly held steady.

Representatives allege that the San Francisco Fed reportedly filed at least six "Matters Requiring Attention" or other warnings against SVB as early as July 2022.