Deposits

On one level, the failed bank's narrative mirrors the interest rate misplay and depositor panic at Bay Area neighbor Silicon Valley Bank. But it's also a deeply personal story about Herbert, who founded First Republic in the 1980s, championed its aggressive growth and failed in a last-ditch attempt to engineer a private-sector rescue.

Meow and Vesto are two firms that help companies invest idle funds in safe instruments such as Treasury bills.

Industry leaders hoped that the emergency sale of First Republic Bank would quell investors' fears, but many banks saw big stock price declines on Tuesday. The instability could put pressure on lawmakers and policymakers to take more decisive action.

Insured deposit caps are now practically meaningless, and current rules for setting deposit insurance premiums do little to block banks' excessive risk taking. There's a better way.

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.

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.

Financial regulation scholar Mark Flannery said in a new research paper that small banks would be more likely to be negatively impacted.

The rush to onboard millions of business depositors in such a short period can strain bank resources, lead to mistakes, and cause some banks to fall behind in conducting due diligence on risky customers.

The Missouri bank was downgraded by credit rating agencies in the wake of last month's bank failures, but CEO Mariner Kemper is pushing back. "We have way, way overblown the impact of two failed banks," he said.

Some 77% of banks did not did not record significant deposit inflows or outflows following Silicon Valley Bank's failure, according to a survey of executives at 567 institutions. The findings highlight the stability of many smaller banks' deposit bases.