First Republic Bank fall: fear of more others to follow.

[lionheart78]

Any bank will surely go bankrupt if its depositors pull out their money.  Remember bank don't have that huge capital.  They mostly rely on the profit from the investment using the money deposited by its client to maintain their operation. The survivability of a bank relies on the trust of its depositors so if the depositors lost trust in the banking system, it is obvious what will happen next.  With the current economic crisis where lots of company is unable to pay their loans it is not a surprise that banks get bankrupt and in the presence of more profitable venturer, depositors are pulling out their funds to invest personally in another venture.

[Baofeng]

If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).

The key word here is "if". The very architecture of the modern banking system is such that not a single bank in the world can withstand the "raid of depositors." Typically, banks' reserve requirements for equity capital do not exceed 10-15% (and this is an optimistic estimate). No one knows how many paper unrealized losses that arose after a sharp rise in the key rate are in reality on the balance sheets.

Right, and the first one that are withdrawing are just average and ordinary Joe, I don't think that individuals that have millions on the banks are the one starting this bank runs. And when banks are overwhelm with this massive withdrawals, they will have to act fast, maybe selling their bonds immediately to cover it in time.

And I have also the same reasons that the Fed interest rate hikes could have affected or one of the factors. Perhaps depositors doesn't want their money sitting on banks because it will not earn them any. So we might as well withdraw it and put it to other assets like crypto.

[Darker45]

With the number of banks, large ones at that, falling one after another in just a matter of months, this is really indicative of a much bigger problem. The sad thing is that all of this might just be the opening salvo. Surely, the ripple effect of what's been happening might even be worse. If the depositors lose trust and confidence of the banks, more billions will flow out. That will cause more damage.

People should now begin to seriously look for a better alternative. Bitcoin offers that.

[Ludmilla_rose1995]

and they say that Bitcoin is more volatile than their banking system? whereas their banking system is much more unstable and very fragile, it could collapse anytime. Just because it was supported by the government and more people adopted it has stayed afloat until now, if it was standalone like Bitcoin I don't think it would have survived.

Bitcoin > Traditional banking system.

[adaseb]

The issue here is that why would anyone keep their money in this bank when they know it has liquidity issues and might go under. Most likely it will get seized by the fdic over the weekend.

Will the fed again back all the deposits over $250K. Most likely since it would cause more panic on other banks but it would also lead to inflation. So the fed is at a tough position now.

[be.open]

I simply want to ask a question - what is the US government doing? Don't they have the slightest responsibility to save the depositor's money? They are sitting on trillions of dollars. What about quantitative easing? Are they doing anything at all?

The banking crisis is real and the banking system is the backbone of the economy. So in such cases, the government needs to step in and provide provisions to help the bank survive. In my country, when two banks showed signs of collapse, the government immediately stepped in and provided them provisions to survive and now they are back on track. I gambled a little with their shares and now I am standing at around 270% profit on my investment.

During weak economic scenario, banks fail. But what's the use of paying IRS if the government doesn't come to rescue? For what people are paying taxes?

Deposits up to $250,000 are insured, and as for everything else - Biden spoke during the collapse of the previous bank a month ago in the style that when you make a profit, it's your profit, and when you make a loss, it's also your loss, because that's how capitalism works.

Do not confuse: the vicious practice of taking profits for yourself, and writing off losses to the state is the privilege of backward corrupt totalitarian regimes like Russia. *sarcasm

[Merit.s]

I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.

It doesn't feel right for the banks, maybe there's something behind that we're don't know...

If the withdrawal of customers funds will lead to the crash of a bank,I don't think that I have problem with that. It is these customers funds that the bank is using to loan out to investors in return of interest for them as profit,without the knowledge of the customers whose funds that the bank used. At the end of the day, the bank will still charge the customer's whose funds that they used for business to pay some fee for maintenance of card,fee for making transactions and the rest. So it is good for the banks to know that without these customers that they are shit. Fiat is vulnerable to inflation and investors have started to understand this,with the recent drop in USD and crash of banks that bitcoin is the only digital gold which has led to those withdrawal to invest in bitcoin.

[be.open]

If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).

Yes, there shouldn't be any reason for alarm if the banks still operating and paying the depositor and account holders their funds but it would be a call for alarm if you're one of the bank shares holders.
Although, the First Republic Bank seems to have everything under control since their shares rebounded today but I believe the issue happening lately with banks should make people know that they need to diversify in cryptocurrency.

I am pleased with your optimism, today the shares of the bank, after a slight rebound, fell by another 43%. I think no one is going to save him, and it is hardly possible at all.

[suzanne5223]

If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).

Yes, there shouldn't be any reason for alarm if the banks still operating and paying the depositor and account holders their funds but it would be a call for alarm if you're one of the bank shares holders.
Although, the First Republic Bank seems to have everything under control since their shares rebounded today but I believe the issue happening lately with banks should make people know that they need to diversify in cryptocurrency.

I am pleased with your optimism, today the shares of the bank, after a slight rebound, fell by another 43%. I think no one is going to save him, and it is hardly possible at all.

Thanks for the update but I am not optimistic about banks or centralized platforms just providing an update about the situation and I believe the reason for the major 43% dump trend on the First Republic Bank shares was due to panic selling of which I expect it to happen and that's why I advise people to start to diversify into cryptocurrency because the centralized platform is easily manipulated.
Nevertheless, this is a win for Bitcoin and all crypto at large.

[Bushdark]

I am still surprised the way banks are falling and crashing due to lack of funds which could have been mismanagement of funds or fake news that might have affected the bank I. Particular. This might continue but I hope it wouldn't spread too fast to the extent of crushing several banks. Inflation is affecting many if these banks including the customers too and many investors are still in panicking because things can go wrong anytime.

For we not to be a victim as an individual customers of many of these banks, we need to make sure that we don't put all our money in bank, we can invest in cryptocurrency to be on a safer side.

[adaseb]

The reports came out that it’s under fdic receivership so it’s pretty much closed. The issue with this is that many depositors from small banks will get scared and they will also withdraw their funds, especially if they have more than 250K.

And the credit crunch will be bad on the economy. These banks won’t be able to provide credit to local businesses anymore and there will be an accelerated recession. We already have this happening in the auto markets where interest rates are over 10% for cars.

[be.open]

So who's next? There seems to be a new leader in the bankruptcy battle, and that is PacWest Bancorp, whose shares were suspended today after falling 34.5%. However, shares of many other regional US banks also show a double-digit drop.

This is not surprising, because after the sale of the remains of the First Republic Bank, the depositors kept their deposits, and the shareholders received nothing. The capitalization of 100 billion was - and it is not.

[siniminomorocomunisakito]

On Tuesday the First Republic Bank  experienced a collapse in their shares due to depositors withdrawing more than $100bn and with the current condition many investors and analysts express fear of an impending collapse of the bank. Although as a recovery plan, the bank plans on selling off some of it's unprofitable assets and also laying off many of it's work force.

Yes, it makes sense to look at the effects. A collapse in First Republic Bank stock and withdrawals of large sums of money by depositors could be an indication of a lack of confidence in the bank and its financial stability and the bank's decision to sell off unprofitable assets and lay off employees could be seen as an attempt to address financial challenges and reassure investors and customers.

The banking industry is also subject to various external factors and uncertainties that can affect its performance, making it difficult to say whether other banks will follow suit. I think it will depend on various factors such as the state of the economy, banking regulations and overall market conditions.

[slapper]

First Republic Bank's struggles? No shocker, with this economy. But banks? Always fragile in crises. Why support a flawed, ancient system?

Time for a game-changer! Ditch huge banks, try community banks or credit unions. More in tune with local folks, less risky moves.

Easier said than done, I know. Banks? Entrenched in our world. Massive effort needed for real change. But the status quo? Unsustainable. Let's think wild, find a fairer, steadier financial future.

[Dunamisx]

With economic crisis facing the world, the banking sector isn't left out and since has been facing different financial crisis forcing some banks to merge in order to be able to continually stay in business, while some others has been forced to close down.

The truth is that more are to follow the likes of this kind of fall, we should know this in dealing with any centralized exchanges or institutions, they are unreliable and we cannot predict their outcome at any point in time, this is part of the reason everyone is getting decentralized because they needed a change to their financial situation, they go against modern financial slavery with using banks aside the risk associated in using them, they get attacked easily and there's no maximum security and privacy in using the unlike bitcoin.

[boyptc]

So who's next? There seems to be a new leader in the bankruptcy battle, and that is PacWest Bancorp, whose shares were suspended today after falling 34.5%. However, shares of many other regional US banks also show a double-digit drop.

This is not surprising, because after the sale of the remains of the First Republic Bank, the depositors kept their deposits, and the shareholders received nothing. The capitalization of 100 billion was - and it is not.

And there's even a statement came from Yellen, she said that by June, the US might ran out of cash.

--> https://www.bbc.com/news/world-us-canada-65452444

Are all of these incidents being tailored and it's actually a scary statement coming from the treasury secretary. It's only a matter of time until we see another huge bank bails out and announces its bankruptcy.

[Andrija Branislav]

This is a bit of fucked up situation where a bank that has the money is going down while others who are probably in worse situations are watching calmly from the sure simply because their users are not that keen to cash out.

I think this is normal, sir, for a bank with a big reason. Firstly, the fact that banks are able to handle large withdrawals without any issues indicates that they have solid reserves of funds to draw on. This is a positive sign that shows the bank has good capital and is able to meet the needs of its customers.

Second, the decision to liquidate assets to prepare for further withdrawals may be a wise move to ensure the bank can continue to operate smoothly. By selling assets to raise cash, banks can maintain sufficient liquidity to meet their obligations without running into financial difficulties.

About The fall in share prices if I'm not mistaken may be a reflection of broader market trends or investor sentiment, not an indication of any underlying problems with the bank itself.

[South Park]

First Republic Bank's struggles? No shocker, with this economy. But banks? Always fragile in crises. Why support a flawed, ancient system?

Time for a game-changer! Ditch huge banks, try community banks or credit unions. More in tune with local folks, less risky moves.

Easier said than done, I know. Banks? Entrenched in our world. Massive effort needed for real change. But the status quo? Unsustainable. Let's think wild, find a fairer, steadier financial future.

A new system can only be born from the ashes of the previous one, banks and the people behind them are never going to give up their privileges no matter what happens, and they are willing to bring the whole economy down if need be, the only thing we can hope for is that once there is a reboot those at the top realize what happened and they decide to make a change, but if I am perfectly honest with you I am not confident that this will happen and most likely nothing will change even under those very difficult circumstances.

[Mate2237]

Bank does not just collapse like that. If the company can't meet up the demand what they normally do is to see a share of the company out and that there is about 6℅ of the company so many workers are always affected by this decision. And the term associated to this partnership is Public Private Partnershp if the company or the bank is own by the government, it beco.es PPP.
The whole world economy is in a dilemma situation. Economic crisis is everywhere. But from my observation the bank is still utilized in the country.

[darkangel11]

A new system can only be born from the ashes of the previous one, banks and the people behind them are never going to give up their privileges no matter what happens, and they are willing to bring the whole economy down if need be, the only thing we can hope for is that once there is a reboot those at the top realize what happened and they decide to make a change, but if I am perfectly honest with you I am not confident that this will happen and most likely nothing will change even under those very difficult circumstances.

Which is why bigger banks are buying out the smaller ones because they know if a smaller bank goes bankrupt people will lose trust in the system. They will also not move to one bank but get lost in the process. Some will go here, others there, some will keep their money under the mattress, some will buy bitcoin, and some will commit suicide after losing their savings.
It's better for a big bank to take them all under its wing, but how long can they keep doing it? At some point a bigger bank will go bust and there won't be anyone big enough to buy it out, so the government will print money to help them, taxing the whole society (because inflation is the tax we all pay) and making the people pay for bank's mistakes.
If you think it won't happen, just check how much the US printed while the FED was hiking rates. The rates going up don't mean the printer isn't working.